North Dakota Corporate Practice of Medicine (CPOM) Overview
- Does North Dakota have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: North Dakota unequivocally enforces a Corporate Practice of Medicine (CPOM) doctrine with no non-profit exceptions as stipulated in N.D. Cent. Code § 43-17-31. Under this legal framework, the state maintains strict regulations and oversight regarding the practice of medicine. To practice medicine in North Dakota, individuals must adhere to a set of stringent requirements, which include obtaining a license, completing necessary educational qualifications, and demonstrating physical, mental, and professional competence for medical practice. This CPOM doctrine is designed to ensure that medical services are delivered by qualified and licensed medical professionals, safeguarding the health and well-being of patients. It prohibits various practices, such as the use of false or assumed names while practicing medicine and knowingly aiding or abetting unlicensed, incompetent, or impaired individuals in medical practice. Additionally, the doctrine prohibits the payment or receipt of fees, commissions, rebates, or other forms of compensation for medical services not genuinely rendered or for patient referrals, except in cases where such arrangements comply with the state's regulations governing professional partnerships, corporations, limited liability companies, or associations. North Dakota's CPOM doctrine underscores its commitment to maintaining the highest standards in healthcare delivery.
- Sources: North Dakota Cent. Code § 43-17-31.
What are Corporate Practice of Medicine (CPOM) Laws?
CPOM laws are regulations that prohibit standard corporations (or other non-physician entities) from practicing medicine or employing practicing physicians. The primary goal of these laws is to ensure that medical decisions are made solely based on patient care and not influenced by corporate interests. These laws vary by state, but they generally aim to protect the physician-patient relationship from commercial influence.
While the focus is often on physicians and medical care, the CPOM family of laws typically apply to a wide range of licensed healthcare providers, including psychologists, speech therapists, physical therapists, occupational therapists, mid-level providers (nurse practitioners and physician assistants), dentists, dietitians, podiatrists, chiropractors, pharmacists, optometrists, and many others. The goal of CPOM laws is shared across these professions: ensure clinical decisions aren’t influenced by corporate pressures.
Who Do These CPOM Laws Apply To?
A state’s CPOM restrictions typically apply to any standard corporate entity that seeks to provide medical or licensed healthcare services. This includes corporations, limited liability companies (LLCs), and other business entities. For an entity to comply with CPOM laws and practice medicine, it typically must be:
- 100% owned by a physician (or physicians) licensed to practice medicine in that state, and
- Formed as a special type of physician-owned legal entity: a Professional Corporation (“PC” for short). In some states, a Professional Limited Liability Company (“PLLC”) is also permitted.
Most states with CPOM laws only permit the corporate practice of medicine through these physician-owned PCs or PLLCs.
Complying with North Dakota CPOM laws
If you're looking to start a healthcare business in North Dakota and need to comply with North Dakota CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
