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Kentucky CPOM Laws

Is Kentucky A Corporate Practice of Medicine (CPOM) State?: Yes


Kentucky generally prohibits the corporate practice of medicine, but it carves out a key exception: Nonprofit entities registered as charitable healthcare providers are exempt. This means these organizations can directly employ physicians and provide medical services without violating Kentucky’s CPOM doctrine, as long as they maintain their charitable status.

This exemption allows charitable healthcare organizations in Kentucky greater flexibility in structuring their operations and delivering care to underserved communities.

Kentucky CPOM Laws

Kentucky Revised Statutes (KRS) Chapter 274 governs the formation and operation of professional service corporations (PSCs) for licensed professionals, including physicians. Under these statutes, only individuals licensed to render the same professional service may form a PSC, and the corporation’s name must include “professional service corporation” or the abbreviation “P.S.C.”

Historically, Kentucky courts have upheld the prohibition against the corporate practice of medicine. In Kendall v. Beiling, 175 S.W.2d 489 (Ky. 1943), and Johnson v. Stumbo, 126 S.W.2d 165 (Ky. 1938), the courts ruled that corporations cannot lawfully engage in the practice of medicine. However, the Kentucky Board of Medical Licensure (KBML) has indicated that it is acceptable for physicians to be employed by hospitals, provided there is no layperson interference with medical decisions.

To comply with Kentucky’s CPOM laws, physicians must ensure that any medical practice is structured as a PSC, wholly owned and controlled by licensed physicians. This structure helps maintain the integrity of medical decision-making and protects the physician-patient relationship from commercial influence.

Navigating the complexities of CPOM regulations can be challenging. Old Mission Medicine offers expert guidance to healthcare providers in Kentucky, assisting in establishing compliant practice structures and ensuring adherence to CPOM laws. By partnering with Old Mission Medicine, physicians can focus on delivering quality patient care, confident that their practice operations align with Kentucky’s legal requirements.