Ohio Corporate Practice of Medicine (CPOM) Overview
- Does Ohio have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes (historically), but may not be enforced currently.
- Summary of Current Law: Ohio's corporate practice of medicine doctrine is primarily rooted in three main categories of statutes: the General Corporation Act, the Professional Associations Law, and rules that govern specific professions such as the Medical Practices Act and Dental Practices Act. Ohio has historically had a CPOM restriction, grounded in common law, which were reinforced by certain historical Ohio Attorney General opinions. Notably, the landscape seemed to shift with the 1994 amendments to the General Corporation Act, Limited Liability Company Act, and Medical Practices Act, departing from Ohio's historical stance against the corporate practice of medicine. That amendment removed language from the Ohio General Corporation act that previously explicitly stated that a corporation could be formed for any purpose "other than for carrying on the practice of any profession". Past Ohio Attorney General opinions have supported the historical prohibition (grounded in reasoning that only natural persons may be licensed to practice medicine, not corporations), and these opinions remain in effect and haven't been withdrawn. Nevertheless, recent indications from the State Medical Board of Ohio suggest an evolving perspective, raising the possibility that the prohibition may no longer be applicable. While the Ohio Legislature and Attorney General have yet to provide a definitive resolution, the current landscape suggests that the enforcement of the corporate practice of medicine doctrine in Ohio may be evolving. That said, current statutes restrict the ability for the corporation to influence “the professional clinical judgment exercised within accepted and prevailing standards of practice" by licensed healthcare professionals.
- Sources: Ohio Rev. Code Ann. § 4731.41(A); Ohio Att’y Gen. Op. No. 87-049 (Aug. 6, 1987).
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 Ohio CPOM laws
If you're looking to start a healthcare business in Ohio and need to comply with Ohio CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
