The Corporate Practice of Medicine (CPOM) doctrine in California is a complex and essential legal framework that regulates how healthcare providers and medical entities operate within the state. CPOM ensures that medical practices remain under the control of licensed professionals, safeguarding the integrity of medical care and preventing non-physician ownership and influence. For healthcare providers operating in California, understanding and adhering to CPOM regulations is paramount to running a compliant and effective practice. In this guide, we will break down the key elements of CPOM law in California, focusing on the updates for 2025, and provide a comprehensive compliance overview.

Navigating California’s Corporate Practice of Medicine (CPOM) regulations is essential for healthcare providers looking to stay compliant. Access Plus Health works closely with medical practices to ensure that collaborations are structured according to California’s CPOM laws. Whether you’re working with physician assistants (PAs) or nurse practitioners (NPs), we’ll help guide you through the complexities of compliance while you focus on delivering exceptional patient care.

What is the Corporate Practice of Medicine (CPOM)?

The CPOM doctrine restricts the ability of corporations and non-medical entities to own or control medical practices or interfere in the delivery of medical care. Under California law, only licensed professionals—such as physicians—are permitted to own and operate medical practices. The law is designed to ensure that medical decisions remain in the hands of those with the necessary qualifications, and not influenced by corporate or financial interests.

Key CPOM Compliance Considerations for Healthcare Providers

1. Physician Ownership Requirements: California’s CPOM law requires that only licensed physicians can own a medical practice. Non-physicians, including corporate entities, cannot have a direct financial interest in a healthcare practice. However, non-physicians can invest in medical entities through legally structured arrangements, such as management service organizations (MSOs), that keep clinical decision-making separate from business operations.
   Compliance Tip: Ensure that your practice is structured so that the licensed healthcare professionals retain control over medical decisions. A management agreement or MSO can be used to separate business operations from clinical practice.
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2. Non-Physician Management and Control: While physicians must retain control over clinical decision-making, it is possible for non-physician investors to have control over the business aspects of a medical practice. In these cases, physicians and business professionals must clearly delineate responsibilities to ensure compliance with CPOM laws.
   Compliance Tip: Create a detailed agreement that outlines the respective roles of physicians and business owners to ensure that the corporate entity does not infringe on the medical decisions of the practice.
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3. Telemedicine and CPOM Compliance: With the rise of telemedicine, CPOM regulations continue to apply to virtual healthcare services. Medical professionals must ensure that telehealth operations comply with the same standards as in-person care. This includes maintaining control over clinical decision-making and ensuring that telemedicine platforms are structured to meet the legal requirements of the state.
   Compliance Tip: Ensure that your telemedicine service complies with California’s CPOM laws, particularly when setting up the structure for non-physician involvement in the telehealth business. Physicians should retain final say in clinical decision-making.
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4. Corporate Liability and Risk Management: Healthcare providers must be cautious about corporate liability when operating in California. Non-compliant entities may face legal actions or penalties that can affect their ability to practice medicine. Therefore, it is essential to create a compliant business structure, maintain transparent records, and regularly consult legal professionals familiar with California’s CPOM laws.
   Compliance Tip: Consult with a healthcare attorney to review your practice’s structure and ensure it is fully compliant with the CPOM regulations. Regular audits and risk assessments will help identify potential compliance gaps.

California’s Corporate Practice of Medicine laws are critical for maintaining the integrity of medical practices within the state. As healthcare evolves, especially with the integration of telemedicine, it is crucial for providers to stay up-to-date with these regulations. By adhering to CPOM guidelines, healthcare providers can ensure they are running a legally compliant practice, avoiding penalties, and most importantly, providing quality care that is not influenced by corporate or financial interests.