Maryland Corporate Practice of Medicine (CPOM) Overview
- Does Maryland have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: Maryland's stance on the corporate practice of medicine (CPM) lacks explicit statutory or regulatory provisions, making it somewhat ambiguous. The Board of Physician Quality Assurance, the state's licensing agency for physicians, has articulated its position on this matter in response to inquiries. According to the Board, a corporation can employ a physician to practice medicine in Maryland only if it falls into specific categories, such as a professional service corporation, a hospital, or a health maintenance organization. This position is based on the rationale that the Medical Practice Act permits only licensed individuals to practice medicine, and corporations cannot meet the licensing requirements unless expressly exempted. Although the Board's official stance is restrictive, it's noteworthy that enforcement in this area is not a top priority. Enforcement is more likely when the corporate employer interferes with the physician's medical judgment and compromises the standard of care. However, the Board's official position could potentially affect unrelated regulatory processes or be used in disputes involving private parties, such as physicians seeking to challenge restrictive covenants.
- Sources: Maryland Board of Physicians Statement Information on Corporate Issues.
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 Maryland CPOM laws
If you're looking to start a healthcare business in Maryland and need to comply with Maryland CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
