Wisconsin Corporate Practice of Medicine (CPOM) Overview
- Does Wisconsin have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: In the Wisconsin Attorney General's legal opinion in OAG 39-86, the legal stance is articulated that business entities are not permitted to engage in the provision of medical services through professionals they employ. This decision is grounded in specific legal statutes of Wisconsin and revolves around several core arguments: Initially, the ruling focuses on the issue of medical practice licensing. According to statute § 448.03(1), any individual or entity, including corporations, must have a valid license to practice medicine or surgery. Corporations inherently fail to meet the licensing criteria outlined in § 448.05, such as graduating from medical school and completing a year of post-graduate training, thereby making their practice of medicine legally untenable. Furthermore, the ruling delves into the ethics of the physician-patient relationship. It suggests that a corporation’s involvement in the medical sector could potentially harm this relationship, steering the focus towards profit generation and the commercialization of medical services, which is counter to traditional public policy and medical ethics. Lastly, the ruling addresses the illegal practice of fee splitting. It points out that when physicians employed by a corporation receive patients through their corporate affiliation, it indirectly leads to the corporation being compensated for referrals. This arrangement contravenes Wisconsin's fee splitting law § 448.08(1), marking it as an unlawful practice.
- Sources: Wisconsin Stat. § 448.02, § 448.08(1), § 448.03(1), § 448.05
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 Wisconsin CPOM laws
If you're looking to start a healthcare business in Wisconsin and need to comply with Wisconsin CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
