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Hawaii CPOM Laws

Is Hawaii A Corporate Practice of Medicine (CPOM) State?: No


Hawaii is not considered a strict Corporate Practice of Medicine (CPOM) state; while the legal framework hints at a prohibition against corporate practice of medicine, it is not significantly enforced and is primarily a point of discussion among healthcare law experts in the state.

Hawaii CPOM Laws

While Hawaii doesn’t have a formally codified Corporate Practice of Medicine (CPOM) doctrine, the state’s legal framework subtly discourages the corporate practice of medicine. This nuanced approach sets Hawaii CPOM apart from states with explicit prohibitions.

The essence of Hawaii CPOM lies in its emphasis on physician licensing and restrictions on for-profit corporations providing professional services outside the Professional Corporations Act. This creates an environment where corporations cannot directly employ physicians to provide medical services.

Despite its presence, CPOM Hawaii hasn’t been a major source of litigation or regulatory action. Unlike other states where contract disputes or unauthorized practice cases frequently arise, Hawaii has seen minimal legal activity related to CPOM.

The doctrine’s primary impact is felt during the formation of new corporations. The Department of Commerce and Consumer Affairs (DCCA) plays a key role in upholding Hawaii CPOM by scrutinizing and sometimes rejecting articles of incorporation that appear to violate the implied prohibition. A notable example involved a local hospital’s attempt to incorporate a subsidiary, which was denied based on these principles.

As Hawaii’s healthcare landscape evolves with the rise of managed care, the full implications of CPOM Hawaii remain to be seen. One area of potential impact is the enforceability of non-compete clauses in physician employment contracts, which could be challenged under the doctrine.

Understanding this nuanced approach to CPOM is crucial for healthcare entities operating in Hawaii. While the lack of explicit prohibitions may seem less restrictive, careful consideration of the state’s legal framework is essential to ensure compliance and avoid potential challenges.