Oregon Corporate Practice of Medicine (CPOM) Overview
- Does Oregon have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: In Oregon, while there isn't a direct statutory prohibition against corporate practice of medicine (CPM), existing case law effectively restricts corporations from hiring physicians. This interpretation stems from the 1947 ruling in Sisemore v. Standard Optical Co., where the Oregon Supreme Court declared it illegal for a corporation to employ an optometrist for fitting eyewear, citing violation of medical licensing requirements. The court in Sisemore emphasized the potential for professional misconduct, lack of expertise, criminal activities, or unethical marketing practices that could lead to an optometrist's license revocation. This rationale underscored the necessity to forbid corporate practice in optometry, aiming to safeguard public welfare. A later case, Neiss v. Ehlers, diverged slightly from this precedent. The Oregon Court of Appeals did not extend the Sisemore ruling to bar an unlicensed individual from owning a minority stake in an optometry business. The court's interpretation was that lay ownership posed a problem only when a corporation exerted dominant control over the practice and its licensed professionals. However, the court did not specify the threshold at which minority ownership would breach the principles established in Sisemore.
- Sources: Oregon Rev. Stat. § 677.100.
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 Oregon CPOM laws
If you're looking to start a healthcare business in Oregon and need to comply with Oregon CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
