Many of our chiropractor clients are interested in expanding their scope of services to better serve their patients. One such way is to integrate their practice with a medical doctor or doctor of osteopathy. While these arrangements offer great benefits to patients and help providers achieve business objectives, they are typically often strictly scrutinized by regulators and professional licensing boards.
One of the biggest barriers to practice integration is the corporate practice of medicine doctrine (CPOM). The CPOM doctrine is both a legal restraint as well as a philosophical one. The doctrine was first adopted by the American Medical Association in an effort to keep the autonomy for medical decisions in the hands of a physician. The CPOM doctrine basically prohibits an unlicensed person from owning or controlling a business entity that provides medical services. The rationale behind the CPOM doctrine is to prevent a non-physician from
interfering with a physician’s judgment. What may seem like a straightforward rule, many states have intricate and often confusing models the require the need to examine statutes, case law and opinion letters from state attorneys general and/or licensing boards.
The consequences for violating the CPOM doctrine can be devastating. We have seen non-competition provisions in employment agreement voided, insurance companies refusal to provide reimbursement for legitimate services and disciplinary actions on professional licenses. For those states that recognize the CPOM doctrine, there is a special methodology to structure
these arrangements to avoid running afoul of state law or policy. It should be noted that there is no federal CPOM doctrine.