Ohio Corporate Practice of Medicine (CPOM) Overview
- Does Ohio have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes (historically), but may not be enforced currently.
- Summary of Current Law: Ohio's corporate practice of medicine doctrine is primarily rooted in three main categories of statutes: (1) the Professional Associations Law, (2) the General Corporation Act, and (3) regulations overseeing specific professions such as the Medical Practices Act, Dental Practices Act, and Chiropractic Act. Notably, the landscape shifted with the 1994 amendments to the General Corporation Act, Limited Liability Company Act, and Medical Practices Act, departing from Ohio's historical stance against the corporate practice of medicine. Although past Ohio Attorney General opinions have supported the historical prohibition, these opinions remain in effect. Nevertheless, recent indications from the State Medical Board of Ohio suggest a changing perspective, raising the possibility that the prohibition may no longer be applicable. While the Ohio Legislature and Attorney General have yet to provide a definitive resolution, the current landscape suggests that the enforcement of the corporate practice of medicine doctrine in Ohio may be waning.
- Sources: Ohio Rev. Code Ann. § 4731.41(A); Ohio Att’y Gen. Op. No. 87-049 (Aug. 6, 1987).
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 Ohio CPOM laws
If you're looking to start a healthcare business in Ohio and need to comply with Ohio CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
