California CPOM Laws
Is California A Corporate Practice of Medicine (CPOM) State?: Yes
California has one of the strongest prohibitions on the Corporate Practice of Medicine (CPOM). with more active enforcement than most other states with a COM doctrine. Corporations may not practice medicine nor facilitate the practice of medicine (e.g. engage with contractor physicians).
California CPOM Laws
Under California law, physicians and surgeons must practice medicine through a professional corporation (PC) or a professional medical corporation. A PC must be at least 51% owned by physicians licensed in California; up to 49% may be owned by specified other types of healthcare licensees, such as registered nurses, physician assistants, and chiropractors. Non-physicians are prohibited from owning any shares of a PC. The PC is the only entity permitted as a care delivery mechanism for physicians; physicians may not deliver medical services via a limited liability company in California.
Permissible Business Structures for Medical Practices
California law permits physicians to organize as professional corporations or professional limited liability companies. These structures allow physicians to collaborate while maintaining professional autonomy. However, the law prohibits physicians from forming business corporations, as corporations cannot be licensed to practice medicine. This restriction ensures that medical decisions are made by licensed professionals, free from corporate influence.
For non-physician entities, California’s CPOM doctrine prohibits them from directly practicing medicine or employing physicians to do so. This restriction upholds the principle that medical practice should be under the control of licensed medical professionals, thereby protecting patient care from corporate influence.
Enforcement and Compliance
Violations of the CPOM regulations in California can lead to significant penalties. Corporations found practicing medicine without the necessary authorization may face fines and other legal consequences. Therefore, entities must ensure strict adherence to the CPOM regulations to avoid legal repercussions.
For healthcare providers and organizations operating in California, understanding and adhering to CPOM regulations is crucial. Old Mission Medicine offers expert guidance to help practices remain compliant with California’s CPOM laws. From structuring appropriate corporate entities to ensuring adherence to state regulations, Old Mission Medicine provides solutions that prioritize both operational efficiency and patient care. Contact Old Mission Medicine today to learn how we can assist your practice in thriving within California’s regulatory landscape.
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