Nebraska Corporate Practice of Medicine (CPOM) Overview
- Does Nebraska have a Corporate Practice of Medicine (CPOM) Doctrine?: No.
- Summary of Current Law: In Nebraska, the Uniform Licensing Law, as outlined in Neb. Rev. Stat. § 71-102(1) (1994 Cum. Supp.), establishes the requirement that individuals must obtain a license from the Department of Health to engage in various medical and healthcare practices such as medicine and surgery, athletic training, dentistry, and more. Despite this, Nebraska has not encountered the issue of the corporate practice of medicine since 1905 when the Nebraska Supreme Court made significant rulings. The court determined that corporations could lawfully provide medical services through duly qualified and licensed physicians under contractual agreements. It emphasized that the qualifications of a medical practitioner are personal, requiring individual licensure, but permitted licensed practitioners to form corporations and contract with patients under the corporate name. Consequently, Nebraska does not currently recognize a corporate practice of medicine doctrine, although potential future public policy changes might impose restrictions on corporations to prevent undue influence on medical decisions or impose limitations on physicians' practice due to referral requirements or financial incentives.
- Sources: State Electro-Med. Inst. v. State, 103 N.W. 1078 (Neb. 1905).
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 Nebraska CPOM laws
If you're looking to start a healthcare business in Nebraska and need to comply with Nebraska CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
