Rhode Island Corporate Practice of Medicine (CPOM) Overview
- Does Rhode Island have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Rhode Island maintains restrictions on the corporate practice of various healthcare professions, including medicine, dentistry, chiropractic, optometry, podiatry, physical therapy, nursing, physician assistantship, and psychology. These restrictions are outlined in the Rhode Island Business Corporation Act, preventing business corporations from offering professional services. However, the state allows certain entities to provide professional services and employ healthcare professionals, provided specific conditions are met. Professionals subject to this prohibition, such as physicians, dentists, and psychologists, can establish Professional Service Corporations (PSCs) under Rhode Island General Laws § 7-5.1-1, et seq. PSCs permit various combinations of healthcare professions, ensuring that officers, directors, and shareholders are licensed individuals in the relevant fields. Written approval from the regulatory agency is necessary for individuals to serve in multiple professional corporations within the same profession. Furthermore, PSCs can only provide services through authorized Rhode Island practitioners. Additionally, Rhode Island permits Limited Liability Companies (LLCs) to offer professional services listed under the Professional Service Corporations law. These regulations aim to maintain the quality and accountability of healthcare services in the state while allowing flexibility in practice structures.
- Sources: Corporate Practice of Medicine: A Fifty State Survey, Vol. 1, Rel. 2E.
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 Rhode Island CPOM laws
If you're looking to start a healthcare business in Rhode Island and need to comply with Rhode Island CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
