Michigan CPOM Laws
Is Michigan A Corporate Practice of Medicine (CPOM) State?: Yes
Michigan enforces the Corporate Practice of Medicine (CPOM) doctrine, which prohibits unlicensed individuals or entities from owning medical practices. This legal framework ensures that medical decisions are made solely by licensed professionals, thereby safeguarding patient care from commercial influences.
Michigan CPOM Laws
Under Michigan’s CPOM regulations, medical practices must be owned exclusively by licensed healthcare professionals. This requirement prevents unqualified individuals from influencing medical judgments and maintains the integrity of patient care. While non-licensed individuals can participate in administrative roles within a medical practice, they are strictly prohibited from holding any ownership interest.
The state’s Limited Liability Company (LLC) Act generally mandates that all members of a healthcare-related professional LLC hold the same professional license. For example, physicians and dentists cannot co-own a single professional LLC. However, an exception allows chiropractors, physicians, osteopathic physicians, and podiatrists to jointly own a practice, facilitating collaborative care within these professions.
Michigan’s CPOM doctrine also prohibits fee-splitting arrangements between licensed medical professionals and non-licensed individuals or entities. This means that profits from medical services cannot be shared with unlicensed parties, including investors or employees. To ensure compliance, compensation for unlicensed individuals and entities, such as management companies, should reflect fair market value for the services provided.
To navigate these restrictions, many healthcare providers in Michigan utilize Management Services Organizations (MSOs). An MSO is a separate entity that handles non-clinical administrative functions—such as billing, accounting, and human resources—allowing physicians to focus on patient care. While the MSO manages business operations, the medical practice remains wholly owned by licensed professionals, maintaining compliance with CPOM laws.
In recent developments, the Michigan State Medical Society has raised concerns about potential violations of the CPOM doctrine, particularly regarding private equity investments in medical practices. In October 2023, the society formally requested that the Michigan Attorney General investigate these issues, highlighting the importance of strict adherence to CPOM regulations to protect patient care from commercial interests.
For healthcare providers and organizations operating in Michigan, understanding and complying with CPOM regulations is essential. Old Mission Medicine offers expert guidance to help practices navigate Michigan’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 Michigan’s regulatory framework.
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