Washington Corporate Practice of Medicine (CPOM) Overview
- Does Washington have a Corporate Practice of Medicine (CPOM) Doctrine?: Yes.
- Summary of Current Law: In 1988's Morelli v. Ehsan case, Washington State's Supreme Court reinforced the corporate practice of medicine (CPM) doctrine. This doctrine generally prevents corporations from engaging in medical practice, unless specific laws allow it. The court's judgment leaned on RCW § 18.71.011 for defining medical practice, as Washington doesn't explicitly ban corporate medical practice. A close reading of case law implies that corporations can't hire healthcare professionals without a legal exemption. Yet, the application of this doctrine is uncertain, particularly regarding non-professional corporation employers, due to a lack of specific case law or administrative guidance in Washington. Many Washington healthcare entities, notably hospitals, employ medical professionals. Some defend this by citing their nonprofit status, arguing that it mitigates issues like commercial exploitation, a key concern of the CPM doctrine. However, Washington lacks clear legal backing for this nonprofit distinction within the doctrine. The evolution of the CPM doctrine in Washington may depend on future court considerations.
- Sources: Washington Rev. Code § 18.57.005.
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 Washington CPOM laws
If you're looking to start a healthcare business in Washington and need to comply with Washington CPOM laws by setting up a MSO-friendly PC structure, Permit can help—affordably and fast. Feel free to reach out.
