As healthcare in California adapts to changing needs and regulatory landscapes, it’s crucial for healthcare providers and medical directors to stay updated on the state’s Corporate Practice of Medicine (CPOM) laws. These regulations govern how medical practices are structured, particularly in terms of ownership and decision-making authority, and have significant implications for both traditional medical businesses and emerging telehealth models. Understanding CPOM compliance is essential to avoid legal issues and ensure that your practice continues to operate smoothly in 2025.

In 2025, understanding California’s Corporate Practice of Medicine (CPOM) compliance is critical for healthcare providers and medical directors. Access Plus Health helps navigate the complexities of CPOM laws, ensuring your medical practice aligns with state regulations. From ownership structures to the supervision of non-physician providers, we break down what healthcare leaders need to know to stay compliant. Our expert guidance ensures that your practice can avoid costly mistakes while maintaining a high standard of patient care. Stay informed with Access Plus Health’s comprehensive approach to California CPOM compliance.

What is the Corporate Practice of Medicine (CPOM)?

The Corporate Practice of Medicine doctrine is a set of laws that restrict non-physician entities from owning or controlling medical practices. In California, these regulations are in place to protect the integrity of patient care and ensure that clinical decisions are made by licensed medical professionals rather than commercial interests.

Under CPOM laws, only physicians can control the clinical aspects of a medical practice. Non-physicians can be involved in the business side of the practice but cannot dictate medical decisions. This structure aims to prevent conflicts of interest where profit motives might compromise patient care.

Key Aspects of CPOM Compliance in 2025

As we move into 2025, healthcare providers and medical directors in California need to ensure that they adhere to the following key elements of CPOM compliance:

1. Physician Control Over Clinical Decisions:
   
   • CPOM regulations require that physicians, not non-medical business owners, retain authority over all clinical decisions. This includes determining treatment plans, medical protocols, patient care procedures, and diagnostic decisions.
   • What Healthcare Providers Should Do: Ensure that medical decisions are made solely by licensed physicians. This is particularly important for any practice that involves non-physician investors or business partners who may attempt to influence medical decision-making.
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2. Ownership Restrictions for Non-Physicians:
   
   • In California, non-physician entities cannot have direct control over a medical practice. While non-physicians can invest in healthcare businesses, they cannot hold a controlling interest in a practice.
   • What Healthcare Providers Should Do: Medical practices should be structured in such a way that only licensed physicians have ownership or operational control of the practice. Non-physician investors or business entities can be involved but only in a non-clinical capacity.
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3. Management Service Organizations (MSOs):
   
   • One way for non-physicians to participate in the healthcare business is through the use of a Management Service Organization (MSO). MSOs handle non-clinical operations such as billing, marketing, and human resources, while physicians retain control of the clinical aspects of the practice.
   • What Healthcare Providers Should Do: If your practice involves non-physician investors or partners, consider setting up an MSO to manage administrative tasks. However, ensure that the MSO agreement does not grant non-physicians control over clinical decisions.
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4. Telemedicine and CPOM Compliance:
   
   • With the rise of telemedicine, CPOM compliance becomes more complex. Telehealth providers must adhere to the same regulations as in-person practices. Physicians must retain control over all medical decisions made during telehealth consultations.
   • What Healthcare Providers Should Do: If your practice offers telemedicine services, ensure that physicians are the only ones making clinical decisions. Non-physician administrators may handle logistics but should not be involved in the patient-provider interaction.
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5. Legal and Financial Risks of Non-Compliance:
   
   • Non-compliance with CPOM laws can lead to severe legal consequences, including penalties, lawsuits, or the loss of medical licensure. Practices that fail to comply may also face financial losses, reputational damage, and an inability to continue operating.
   • What Healthcare Providers Should Do: Conduct regular legal audits to ensure your practice complies with CPOM regulations. Working with healthcare attorneys who specialize in CPOM laws can help you navigate complex legal requirements and avoid penalties.

How Medical Directors Should Ensure CPOM Compliance

For medical directors, maintaining compliance with CPOM regulations is vital to the success and sustainability of the medical practice. In many cases, medical directors may be involved in overseeing clinical decisions, and they play a key role in ensuring that practices operate within the boundaries of the law.

1. Stay Informed on CPOM Laws:
   
   • Medical directors should stay updated on the latest regulatory changes and interpretations of CPOM laws. As the healthcare landscape evolves, so too will the rules and guidelines governing CPOM compliance.
   • What Medical Directors Should Do: Make it a priority to attend industry conferences, participate in continuing education programs, and consult with legal professionals to ensure that your practice remains compliant.
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2. Ensure Clear Separation of Business and Clinical Operations:
   
   • Medical directors must oversee the clinical aspects of the practice while ensuring a clear distinction between the business side of operations. This means that non-physician owners or administrators should never have influence over medical decisions.
   • What Medical Directors Should Do: Establish and enforce clear policies that delineate the roles and responsibilities of physicians and non-physicians. Ensure that the practice’s governance structure reflects these boundaries.
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3. Conduct Regular Audits:
   
   • Regular audits of business and clinical operations can help identify potential risks and prevent non-compliance. Audits can also ensure that all business structures, such as MSOs, are functioning within the legal framework of CPOM laws.
   • What Medical Directors Should Do: Initiate regular reviews of both the business and clinical aspects of the practice to ensure compliance with CPOM regulations. If necessary, work with legal experts to review and revise agreements with MSOs or other third-party service providers.
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Staying compliant with California’s Corporate Practice of Medicine (CPOM) laws is a key responsibility for healthcare providers and medical directors in 2025. By ensuring that physicians retain control over clinical decisions, structuring practices in accordance with CPOM regulations, and utilizing MSOs for administrative management, you can navigate these laws effectively and minimize the risk of non-compliance.

For healthcare providers, telehealth companies, and medical directors, understanding CPOM compliance is essential to operating legally and maintaining a high standard of care for patients. Regular audits, staying informed on regulatory updates, and seeking legal counsel are all critical steps in ensuring that your practice is fully compliant and positioned for success in 2025 and beyond.