Virginia Corporate Practice of Medicine (CPOM) Overview
- Does Virginia have a Corporate Practice of Medicine (CPOM) Doctrine?: No.
- Summary of Current Law: In Virginia, there isn't a specific corporate practice of medicine statute place, nor a clear body of case law or enforcement activity that would imply a strong unambiguous ban. While Virginia Code Section 54.1-2902 and Section 54.1-111(A)(1) establish that practicing medicine without a license is unlawful and extend this prohibition to "person, partnership, corporation, or other entity," there hasn't been a legal examination to determine whether these provisions forbid corporations from employing physicians. Meanwhile, Virginia Code Section 54.1-111.D says that nothing should be understood to prevent Virginia corporate entities “that employ or contract with an individual licensed by a health regulatory board, from (i) practicing or engaging in the practice of a profession or occupation for which such individual is licensed, (ii) providing or rendering professional services related thereto through the licensed individual, or (iii) having a legitimate interest in enforcing the terms of employment or its contract with the licensed individual." A set of two recent opinions from the Virginia Attorney General helped give more clarity to employers. First, in a 1992 opinion, it was clarified that Virginia's laws do not prohibit nonprofit corporations, including hospitals, from employing licensed physicians. As long as the physician retains control over medical decisions, maintains professional judgment integrity, and upholds the physician-patient relationship, such employment arrangements are permissible. The second (and more recent) opinion in 1955 extended this interpretation to for-profit subsidiaries of nonprofit hospital corporations, reaffirming that employing physicians doesn't constitute the unlawful practice of medicine if physicians maintain exclusive control over professional medical judgment. These opinions provide guidance on the permissibility of physician employment by corporations in Virginia, and some of them have been adopted by the Virginia Board of Medicine. A key requirement is that physicians retain exclusive control over decisions requiring professional medical judgment, even if they are employed by a corporation that is not physician-owned.
- Sources: Virginia Code § 54.111(D); Va. Bd. of Medicine, Guidance Doc. 85-21
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 Virginia CPOM laws
If you're looking to start a healthcare business in Virginia and need to comply with Virginia CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
