The Corporate Practice of Medicine (CPOM) doctrine is a critical aspect of California’s healthcare regulatory landscape. Designed to maintain the autonomy of healthcare professionals, CPOM ensures that medical practices in California are operated and controlled by licensed physicians, thereby preventing non-medical entities from influencing the provision of patient care. As healthcare in California continues to evolve, understanding and adhering to CPOM laws is essential for healthcare providers, telemedicine operators, and medical businesses. In this blog, we’ll explore key updates and tips for staying compliant with CPOM regulations in California for 2025.

Compliance with California's CPOM regulations is critical for any healthcare provider looking to avoid legal pitfalls. Access Plus Health provides healthcare practices with the resources and guidance needed to navigate these regulations effectively.

What is the Corporate Practice of Medicine (CPOM)?

CPOM laws are established to ensure that only licensed medical professionals make clinical decisions. In California, these laws prohibit non-physician ownership or control of medical practices. While non-medical professionals can invest in healthcare businesses, they cannot directly manage or influence the medical decisions within a practice. This legal framework helps preserve patient care and keeps clinical decisions independent of commercial interests.

Key Compliance Considerations for 2025

1. Physician Ownership is Mandatory
   
   • Under CPOM regulations, only licensed physicians can own medical practices in California. Non-physicians, including corporations, may not own or control a medical practice. However, they can have indirect financial involvement in medical practices through legally structured entities such as management service organizations (MSOs), which are designed to separate business operations from medical decisions.
   • Action Step: Ensure that your medical practice structure complies with the requirement that licensed physicians must retain control over medical decision-making. Consider working with legal experts to structure MSOs that maintain CPOM compliance.
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2. Non-Physician Involvement in Medical Practices
   
   • Non-physicians (e.g., business professionals) can manage the administrative aspects of medical practices, such as marketing, human resources, and billing, but cannot influence clinical decisions. Practices must have clear agreements and systems in place to ensure that physicians retain full control over patient care.
   • Action Step: Create a detailed management agreement that clarifies the roles of business and clinical personnel. Physicians must have sole authority in clinical matters, while non-physicians can focus on business operations without crossing into the medical domain.
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3. Telemedicine and CPOM Compliance
   
   • The rise of telehealth services has brought new challenges in maintaining CPOM compliance. While telemedicine is a convenient and essential form of healthcare delivery, the same rules apply: physicians must control the clinical aspects of telemedicine, and non-physicians must not influence the patient-provider interaction or decision-making.
   • Action Step: When implementing telemedicine services, ensure that your platform and operational model respect CPOM laws by preserving physician control over clinical decision-making. Any non-physician involvement in the telehealth business should be limited to operational or administrative functions.
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4. Legal and Financial Risks of Non-Compliance
   
   • Failure to comply with CPOM regulations can result in significant legal and financial consequences for a practice, including loss of licensure, penalties, and lawsuits. Healthcare providers must ensure that their practices comply with CPOM laws to avoid these risks.
   • Action Step: Regularly consult with healthcare attorneys to ensure that your practice remains compliant with California’s CPOM laws. Also, conduct annual compliance audits to address potential issues early.

Conclusion

Staying compliant with California’s CPOM laws is vital for healthcare providers and businesses looking to operate ethically and legally in the state. As telemedicine and other innovations continue to grow, it's essential to stay informed and consult with legal experts to ensure full compliance. By following CPOM regulations, providers can focus on offering high-quality, patient-centered care without the interference of non-physician business interests.