CPOM Laws by State

Q: Which states have the strictest CPOM restrictions?

States commonly considered to have the strictest CPOM restrictions include California, New York, New Jersey, Massachusetts, Illinois, and Pennsylvania . These states closely scrutinize ownership structures, management agreements, and compensation arrangements to ensure that non-physicians do not exert control over clinical decision-making.

Q: Can non-physicians own medical practices?

It depends on the state. In CPOM-restricted states , non-physicians generally cannot own medical practices. In partial or non-restricted states , non-physicians may be permitted to own healthcare businesses, but clinical services must still be delivered by licensed clinicians and remain free from improper control or fee-splitting.

Q: How do MSOs operate in CPOM states?

In CPOM-restricted states, Management Services Organizations (MSOs) operate by providing non-clinical services—such as billing, HR, marketing, and operations—to physician-owned practices. The MSO does not own the medical practice or control clinical decisions, which remain exclusively under physician authority.

Q: Are CPOM laws the same for all healthcare specialties?

No. CPOM laws can vary by healthcare specialty . Some states provide ownership exceptions or different rules for certain professions (such as dentistry, optometry, or psychology), while others apply CPOM restrictions uniformly across all medical services. Specialty-specific rules are often addressed on a state-by-state basis.

Q: Do CPOM laws apply to telehealth?

Yes. CPOM laws generally apply to telehealth services in the same way they apply to in-person care. If a state restricts non-physician ownership or clinical control, those restrictions typically apply regardless of whether care is delivered virtually or in person.

Q: How often do CPOM laws change?

CPOM laws change infrequently at the statutory level , but enforcement interpretations can evolve over time through regulatory guidance, attorney general opinions, and court decisions. Because of this, healthcare organizations should periodically review their structures for ongoing compliance.

Q: Who is allowed to own a professional corporation (PC)?

In most CPOM-restricted states, a professional corporation (PC) must be owned entirely—or primarily—by licensed professionals authorized to practice that profession (such as physicians). Ownership by non-licensed individuals is typically prohibited or heavily restricted.

Q: What is a “friendly PC” model?

A friendly PC model is a common CPOM-compliant structure where a physician owns the clinical entity (the PC), while a separate MSO provides non-clinical management services. The physician retains control over all medical decisions, while the MSO supports operations under a carefully structured agreement.

Q: Can an MSO control clinical decision-making?

No. An MSO cannot control clinical decision-making in CPOM-restricted states. Medical judgment, treatment decisions, clinical protocols, and supervision of clinicians must remain under the exclusive authority of licensed physicians.

A 50-State Guide to Corporate Practice of Medicine

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What Is the Corporate Practice of Medicine (CPOM) and Why It Matters

The Corporate Practice of Medicine (CPOM) doctrine refers to a collection of state laws, regulations, and enforcement interpretations that restrict who may own, control, or profit from a medical practice. While the doctrine originated to protect clinical independence, its modern application directly affects how healthcare businesses are structured, financed, and scaled.

CPOM laws matter because non-compliant ownership or control arrangements can invalidate contracts, trigger enforcement actions, expose investors to clawbacks, and place physician licenses at risk—often years after a business is already operating. CPOM compliance is especially critical for multi-state healthcare operators, management services organizations (MSOs), digital health companies, and private equity-backed platforms.

This guide is designed for healthcare operators, founders, MSOs, investors, compliance teams, and clinical leaders who need a clear, state-by-state understanding of CPOM laws and the most common compliant structures used across the United States.

Key CPOM Takeaways

CPOM laws vary significantly by state and are enforced unevenly.
Some states strictly prohibit non-physician ownership of medical practices.
Other states allow partial or indirect control through management arrangements.
Several states permit direct ownership, but still regulate clinical control and fee-splitting.
Enforcement risk increases when non-physicians influence clinical decision-making or physician compensation.
The most common compliant structures include Friendly PC models, MSO agreements, and medical director arrangements.

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CPOM States at a Glance

State	CPOM Restricted?	Common Structure	Notes
Alabama	Partial / Nuanced	Friendly PC + MSO	Traditional doctrine
Alaska	Partial / Nuanced	Direct ownership	Limited CPOM enforcement
Arizona	Not Restricted	Direct ownership	Clinical control still regulated
Arkansas	Restricted	Friendly PC	Conservative interpretation
California	Restricted	Friendly PC + MSO	Strict enforcement
Colorado	Restricted	MSO agreements	Exceptions apply
Connecticut	Restricted	Friendly PC	Active scrutiny
Delaware	Not Restricted	Direct ownership	Business-friendly
Florida	Not Restricted	Direct ownership	Specialty nuances
Georgia	Restricted	Friendly PC	Board oversight
Hawaii	Partial / Nuanced	MSO agreements	Limited case law
Idaho	Partial / Nuanced	Direct ownership	Minimal CPOM doctrine
Illinois	Restricted	Friendly PC	Longstanding doctrine
Indiana	Restricted	Friendly PC	Conservative boards
Iowa	Restricted	MSO agreements	Case-specific
Kansas	Restricted	Friendly PC	Physician-centric
Kentucky	Restricted	Friendly PC	Traditional doctrine
Louisiana	Restricted	Friendly PC	Civil law overlay
Maine	Partial / Nuanced	MSO agreements	Limited enforcement
Maryland	Restricted	MSO agreements	Hospital exceptions
Massachusetts	Restricted	Friendly PC	Strict corporate limits
Michigan	Restricted	MSO agreements	Board-driven
Minnesota	Restricted	MSO agreements	Specialty carve-outs
Mississippi	Restricted	Friendly PC	Conservative interpretation
Missouri	Restricted	Friendly PC	Statutory limits
Montana	Partial / Nuanced	Direct ownership	Low enforcement
Nebraska	Partial / Nuanced	Friendly PC	Traditional doctrine
Nevada	Partial / Nuanced	MSO agreements	Specialty exceptions
New Hampshire	Partial / Nuanced	MSO agreements	Limited guidance
New Jersey	Restricted	Friendly PC	Aggressive enforcement
New Mexico	Restricted	MSO agreements	Case-specific
New York	Restricted	Friendly PC	High scrutiny
North Carolina	Restricted	Friendly PC	Conservative boards
North Dakota	Restricted	MSO agreements	Cooperative model
Ohio	Partial / Nuanced	MSO agreements	Complex case law
Oklahoma	Partial / Nuanced	Friendly PC	Statutory doctrine
Oregon	Restricted	MSO agreements	Regulatory nuance
Pennsylvania	Restricted	Friendly PC	Longstanding doctrine
Rhode Island	Restricted	MSO agreements	Limited guidance
South Carolina	Restricted	Friendly PC	Board-centric
South Dakota	Restricted	MSO agreements	Limited enforcement
Tennessee	Restricted	Friendly PC	Conservative boards
Texas	Partial / Nuanced	MSO agreements	Statutory exceptions
Utah	Not Restricted	Direct ownership	Modern interpretation
Vermont	Partial / Nuanced	MSO agreements	Cooperative history
Virginia	Partial / Nuanced	MSO agreements	Regulatory nuance
Washington	Restricted	MSO agreements	Active AG oversight
West Virginia	Restricted	Friendly PC	Traditional doctrine
Wisconsin	Restricted	MSO agreements	Specialty carve-outs
Wyoming	Partial / Nuanced	Direct ownership	Minimal CPOM doctrine

State-by-State CPOM Laws

Alabama CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians.
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures.
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Interpreted through professional-entity rules; can be fact-specific
Last Updated: December 2025

Alaska CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Interpreted through professional-entity rules; can be fact-specific
Last Updated: December 2025

Arizona CPOM Laws

CPOM Status: Not Restricted
Who Must Own the Practice: Ownership generally permitted; medical services must be delivered by licensed clinicians
What Non-Physicians Can Do: Own/operate the business; avoid clinical control and improper fee-splitting
Common Compliant Structures: Direct ownership (where allowed); MSO support model; Medical director arrangement (as required)
Key Notes / Exceptions: CPOM prohibition not explicit; other rules still constrain control/compensation
Last Updated: December 2025

Arkansas CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: CPOM doctrine generally recognized; entity and compensation design matters
Last Updated: December 2025

California CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional corporations
What Non-Physicians Can Do: Provide non-clinical administrative services only
Common Compliant Structures: Friendly PC; MSO agreements; Medical director arrangements
Key Notes / Exceptions: One of the most strictly enforced CPOM states
Last Updated: December 2025

Colorado CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Stronger CPOM posture than many states; structures should be conservative
Last Updated: December 2025

Connecticut CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional-entity restrictions apply; avoid any de facto clinical control
Last Updated: December 2025

Delaware CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Interpreted through professional-entity rules; can be fact-specific
Last Updated: December 2025

Florida CPOM Laws

CPOM Status: Not Restricted
Who Must Own the Practice: Ownership generally permitted; medical services must be delivered by licensed clinicians
What Non-Physicians Can Do: Own/operate the business; avoid clinical control and improper fee-splitting
Common Compliant Structures: Direct ownership (where allowed); MSO support model; Medical director arrangement (as required)
Key Notes / Exceptions: Often treated as “no classic CPOM,” but other healthcare rules still apply
Last Updated: December 2025

Georgia CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Grounded in professional entity + licensing frameworks; keep contracts conservative
Last Updated: December 2025

Hawaii CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Limited public guidance; structure conservatively where risk exists
Last Updated: December 2025

Idaho CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Interpreted through professional-entity rules; can be fact-specific
Last Updated: December 2025

Illinois CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: CPOM supported by case law and regulation; strong emphasis on physician control
Last Updated: December 2025

Indiana CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Maintain physician control over clinical operations and clinician employment decisions
Last Updated: December 2025

Iowa CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Typically derived from professional entity and licensing frameworks
Last Updated: December 2025

Kansas CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Grounded in professional corporation statutes; keep control provisions clean
Last Updated: December 2025

Kentucky CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Traditional CPOM posture; preserve physician autonomy in agreements
Last Updated: December 2025

Louisiana CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Entity and licensure rules drive CPOM posture; avoid fee-splitting issues
Last Updated: December 2025

Maine CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Limited public guidance; facts and structure matter
Last Updated: December 2025

Maryland CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional entity rules drive restrictions; ensure physician clinical control
Last Updated: December 2025

Massachusetts CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Strong professional entity restrictions; conservative contract drafting recommended
Last Updated: December 2025

Michigan CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Typically analyzed via professional entity and licensing rules; preserve physician autonomy
Last Updated: December 2025

Minnesota CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional firm statutes often drive analysis; verify carve-outs on state page
Last Updated: December 2025

Mississippi CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Traditional CPOM posture; avoid control over clinical judgment and compensation
Last Updated: December 2025

Missouri CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional corporation statutes commonly drive CPOM posture
Last Updated: December 2025

Montana CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Limited public guidance; facts and structure matter
Last Updated: December 2025

Nebraska CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Interpreted through professional-entity rules; can be fact-specific
Last Updated: December 2025

Nevada CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Commonly treated as nuanced with carve-outs; structure conservatively
Last Updated: December 2025

New Hampshire CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Limited guidance; preserve physician clinical control in agreements
Last Updated: December 2025

New Jersey CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Higher-scrutiny CPOM environment; keep contracts conservative
Last Updated: December 2025

New Mexico CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Often evaluated through professional entity statutes and licensure rules
Last Updated: December 2025

New York CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: High scrutiny; avoid de facto control and improper compensation mechanics
Last Updated: December 2025

North Carolina CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Preserve physician autonomy over clinical decisions and clinician oversight
Last Updated: December 2025

North Dakota CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional entity rules often drive analysis; structure conservatively
Last Updated: December 2025

Ohio CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Often treated as fact-specific; preserve clinical independence in contracts
Last Updated: December 2025

Oklahoma CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Interpreted through professional entity rules; can be fact-specific
Last Updated: December 2025

Oregon CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional entity rules shape restrictions; avoid non-physician clinical control
Last Updated: December 2025

Pennsylvania CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Widely treated as CPOM-restricted; friendly PC + MSO models are common
Last Updated: December 2025

Rhode Island CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Evaluated through professional entity statutes; preserve physician clinical control
Last Updated: December 2025

South Carolina CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Board-centric posture; keep control provisions clean and conservative
Last Updated: December 2025

South Dakota CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Professional entity + licensing frameworks commonly drive restrictions
Last Updated: December 2025

Tennessee CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Preserve physician autonomy; avoid de facto clinical control in agreements
Last Updated: December 2025

Texas CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Physicians or physician-owned entities; exceptions and permitted models may apply
What Non-Physicians Can Do: Provide management services; avoid clinical control and impermissible compensation arrangements
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Texas is nuanced; permitted models exist but agreements must be drafted carefully
Last Updated: December 2025

Utah CPOM Laws

CPOM Status: Not Restricted
Who Must Own the Practice: Ownership generally permitted; medical services must be delivered by licensed clinicians
What Non-Physicians Can Do: Own/operate the business; avoid clinical control and improper fee-splitting
Common Compliant Structures: Direct ownership (where allowed); MSO support model; Medical director arrangement (as required)
Key Notes / Exceptions: Often treated as not having a classic CPOM ban; other healthcare rules still apply
Last Updated: December 2025

Vermont CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Limited public guidance; structure conservatively where risk exists
Last Updated: December 2025

Virginia CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Often treated as nuanced; agreements should clearly preserve physician independence
Last Updated: December 2025

Washington CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Higher scrutiny in certain contexts; preserve physician control over clinical operations
Last Updated: December 2025

West Virginia CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: Traditional CPOM posture; keep control provisions clean and conservative
Last Updated: December 2025

Wisconsin CPOM Laws

CPOM Status: Restricted
Who Must Own the Practice: Licensed physicians or physician-owned professional entities
What Non-Physicians Can Do: Provide non-clinical management services only; no clinical control
Common Compliant Structures: Friendly PC + MSO; MSO management services agreement; Medical director arrangement
Key Notes / Exceptions: May include carve-outs by service line; verify on state page
Last Updated: December 2025

Wyoming CPOM Laws

CPOM Status: Partial / Nuanced
Who Must Own the Practice: Varies by entity type; clinical control must remain with licensed clinicians
What Non-Physicians Can Do: Provide management services; avoid de facto clinical control and prohibited compensation structures
Common Compliant Structures: MSO agreement; Entity separation (clinical vs. admin); Medical director arrangement
Key Notes / Exceptions: Limited public guidance; facts and structure matter
Last Updated: December 2025

Compliance Disclaimer: This guide is provided for informational purposes only and does not constitute legal advice. CPOM laws and enforcement interpretations vary by state and change over time. Healthcare organizations should consult qualified legal counsel when structuring or modifying ownership and management arrangements.

Common CPOM-Compliant Structures

Friendly Professional Corporation (Friendly PC)

A physician owns the clinical entity while a non-physician MSO provides management services. This structure is common in CPOM-restricted states and requires carefully drafted agreements to avoid improper control or fee-splitting.

MSO Management Services Agreements

An MSO provides administrative, operational, and business services while clinical decisions remain exclusively with licensed providers. MSO agreements must be commercially reasonable and avoid de facto clinical control.

Medical Director Arrangements

Physicians provide clinical oversight, supervision, and protocol development. Compensation must reflect fair market value and align with state-specific scope requirements.

Ownership Exceptions

Some states allow limited non-physician ownership for specific professions, hospital-affiliated entities, or statutorily defined models. These exceptions are narrow and state-specific.

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Frequently Asked Questions

What is the Corporate Practice of Medicine?

The Corporate Practice of Medicine (CPOM) refers to state laws and regulatory doctrines that restrict who may own, control, or profit from a medical practice. In CPOM-restricted states, only licensed physicians—or physician-owned professional entities—may own medical practices or make clinical decisions, while non-physicians are limited to non-clinical, administrative roles.

Which states have the strictest CPOM restrictions?

States commonly considered to have the strictest CPOM restrictions include California, New York, New Jersey, Massachusetts, Illinois, and Pennsylvania. These states closely scrutinize ownership structures, management agreements, and compensation arrangements to ensure that non-physicians do not exert control over clinical decision-making.

Can non-physicians own medical practices?

It depends on the state. In CPOM-restricted states, non-physicians generally cannot own medical practices. In partial or non-restricted states, non-physicians may be permitted to own healthcare businesses, but clinical services must still be delivered by licensed clinicians and remain free from improper control or fee-splitting.

How do MSOs operate in CPOM states?

In CPOM-restricted states, Management Services Organizations (MSOs) operate by providing non-clinical services—such as billing, HR, marketing, and operations—to physician-owned practices. The MSO does not own the medical practice or control clinical decisions, which remain exclusively under physician authority.

Are CPOM laws the same for all healthcare specialties?

No. CPOM laws can vary by healthcare specialty. Some states provide ownership exceptions or different rules for certain professions (such as dentistry, optometry, or psychology), while others apply CPOM restrictions uniformly across all medical services. Specialty-specific rules are often addressed on a state-by-state basis.

Do CPOM laws apply to telehealth?

Yes. CPOM laws generally apply to telehealth services in the same way they apply to in-person care. If a state restricts non-physician ownership or clinical control, those restrictions typically apply regardless of whether care is delivered virtually or in person.

How often do CPOM laws change?

CPOM laws change infrequently at the statutory level, but enforcement interpretations can evolve over time through regulatory guidance, attorney general opinions, and court decisions. Because of this, healthcare organizations should periodically review their structures for ongoing compliance.

Who is allowed to own a professional corporation (PC)?

In most CPOM-restricted states, a professional corporation (PC) must be owned entirely—or primarily—by licensed professionals authorized to practice that profession (such as physicians). Ownership by non-licensed individuals is typically prohibited or heavily restricted.

What is a “friendly PC” model?

A friendly PC model is a common CPOM-compliant structure where a physician owns the clinical entity (the PC), while a separate MSO provides non-clinical management services. The physician retains control over all medical decisions, while the MSO supports operations under a carefully structured agreement.

Can an MSO control clinical decision-making?

No. An MSO cannot control clinical decision-making in CPOM-restricted states. Medical judgment, treatment decisions, clinical protocols, and supervision of clinicians must remain under the exclusive authority of licensed physicians.

What happens if a practice violates CPOM laws?

Violations of CPOM laws can result in regulatory enforcement actions, contract invalidation, repayment of improperly collected fees, civil penalties, or professional discipline. In some cases, violations can also create downstream risks for investors and business partners.

How are CPOM laws enforced?

CPOM laws are enforced through a combination of state medical boards, licensing agencies, attorneys general, and courts. Enforcement may arise from audits, complaints, whistleblowers, or disputes between business partners.

Can management fees violate CPOM rules?

Yes. Management fees can violate CPOM rules if they are structured in a way that effectively gives the MSO control over clinical operations or ties compensation directly to medical decision-making or professional fees. Fees must generally be commercially reasonable and unrelated to clinical volume or outcomes.

How do CPOM laws intersect with fee-splitting laws?

CPOM and fee-splitting laws are closely related. Even in states without strict CPOM prohibitions, fee-splitting rules often prohibit sharing professional fees with non-licensed individuals. A structure that complies with CPOM but violates fee-splitting laws may still be non-compliant.

What activities must remain under physician control?

Activities that typically must remain under physician control include: clinical decision-making and treatment protocols; hiring, supervision, and termination of clinicians (for clinical reasons); quality-of-care standards; medical policies and procedures; and physician compensation tied to clinical services.