Title 20 823 (medical corporation not deemed to be engaged in the corporate practice of medicine) Additionally, MSOs are used to navigate state "corporate practice of medicine" (CPOM) laws prohibiting non-physician-owned business entities from practicing medicine or employing licensed health care providers. Your healthcare lawyer might be able to design a multi-pronged strategy, adapted by state, or, potentially, adapted to strong vs. weak corporate practice of medicine states. For example, some applicants use employment and management agreements instead of shareholder control agreements to bind the physician shareholder to the Parent. Some medical spas are opened by nurses, believing that because you have a medical license you can do whatever you want. The challenge is that the healthcare venture managed by able healthcare entrepreneurs wants to call the shots . georgia corporate practice of medicine. The corporate practice of medicine doctrine (CPOM) is a complex ruling that can easily result in legal problems if not followed accordingly. Setting the parameters under which the physician will enter into contractual relationships with third-party payers. in your telemedicine venture? For example, a hypothetical Professional Medical Corporation named Occupational Therapists For Everyone a Professional Medical Corporation may only provide occupational therapy services. In OCA, Inc. v. Hodges, 615 F. Supp. Under the auspices of protecting the public, the American Medical Association (AMA) promulgated the initial version of the CPOM doctrine. Substance abuse treatment centers must steer carefully when sending patients for labs. Wednesday, June 6, 2012. As a general breakdown, the following states follow the CPOM: Arizona Arkansas California Colorado Connecticut Georgia Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Montana Nevada New Jersey New York North Carolina North Dakota Ohio Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Washington West Virginia Wisconsin. In some states, there are exceptions pertaining to the practice of non-profit organizations. Many lawyers say that corporate practice of medicine is dead that this is a new age of healthcare and we no longer need to worry about these old 20th century, or maybe 19th century healthcare rules. The "corporate practice of medicine" doctrine arose out of early-20th-century efforts by the American Medical Association to professionalize medicine through the development of an ethical code preventing quackery and the commercial exploitation of physicians. Like any other applicant, the PSC must meet the organizational and operational tests. The corporate practice of medicine (CPM) rule or doctrine forbids medical management organizations (MSOs) from meddling with and effectively, directly or indirectly, control or in some way influencing, the affairs of medical practice. In some states (for example, California), it can be a percentage of gross revenues, whereas in other states (for example, New York), the management fee, at least historically, has had to be a flat fee. clinic, or other medical or dental facility prior to, incident to, and appropriate to the . In other words, medical judgment and practice should not by unduly influenced by the MSOs. In general, a Professional Medical Corporation may only provide services in its field. The court concluded that the medical practice was essentially under the control of the management company and the physician was a nominal owner; thus, because the medical practice was not legitimately structured, it was not allowed to submit medical insurance claims. 3 State law may provide for specific exceptions; for hospitals, for example. Medical Groups, Medical Centers You may access the Board Rules by clicking here. Manager (i.e., Parent) exercises control of all business aspects of the PSCs operations. Cosmetics Companies This and resulted in a $4 million verdict in favor of Allstate. Contact us online or call us today for more information on how the CPOM Doctrine impacts your existing or emerging practice. Another risk is fee-splitting, which many states prohibit to reduce the likelihood that unnecessary medical services will be provided to maximize income. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture. public policy considerations underlying the cpom include concerns that the corporate employment or control of a licensed professional: (1) commercializes and debases licensed professions; (2) undermines the physician-patient relationship and the physician's exercise of independent medical judgment; and (3) allows unlicensed corporate entities to the corporate practice of medicine doctrine. How Can a Multi-Disciplinary Health & Wellness Platform Handle Legal Risks? 178 (1938), which has not been overruled or modified in the 82 years since the original holding. Consider whether the applicant described, in detail, the methods and procedures through which the exempt parent controls the shareholder; If there are indicators of a lack of control by the exempt parent you should consider further development or consultation with counsel, if appropriate. However, court decisions and Attorney General Opinions have These documents should have established adequate control by the exempt parent. Lets say, for example, compounded skin care creams to treat acne? Well, we appreciate the medical board promoting legal services. For example, in Georgia: All this suggests that Georgia has a strong prohibition against Corporate Practice of Medicineat least for the moment, as these legal rules can be in flux. Memo 1981-23 (1981), Corporations that employ physicians to provide medical services are engaged in the corporate practice of medicine.1 Several states restrict the practice of medicine by lay controlled corporations.2 These CPOM states. The Parent can control the shareholder through an. v. OCA, Inc., 592 F.Supp.2d 906 (E.D. Fenton Law Group has a practice focused on the transactional legal issues that arise in the medical industry including, the CPOM doctrine. For example, in Virginia there is at least one Attorney General opinion that is permissive with respect to Corporate Practice of Medicine: The Virginia Attorney General concluded that Virginia statutes and court decisions allow a hospital to employ a physician as long as the employment agreement authorizes the physician to exercise control over the diagnosis and treatment of the patient, the physicians professional judgment is not improperly influenced by commercial or lay concerns, and the physician-patient relationship is not altered. For example, the California Medical Board says this in its page on Corporate Practice of Medicine: The Medical Practice Act, Business and Professions Code section 2052, provides: Any person who practices or attempts to practice, or who holds himself or herself out as practicing[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificateis guilty of a public offense.. Vasilios J. Medical Groups, Medical Centers Title 12. For health care investors considering a venture in a health care service that requires professional licensure, consulting with an attorney broadly experienced in the web of state-specific laws and regulations can help ensure efficient platform structuring and enterprise compliance and avoid criminal liability. State licensure laws, including fee-splitting and the Corporate Practice doctrine, can complicate that collaboration. 2. Responding to state professional board inquiries, information requests, complaints, investigations, and other related matters. You may access the full text of the Georgia OCGA at site here. Decisions regarding coding and billing procedures for patient care services. Please enable javascript. E.g. How you know. Official Code of Georgia Annotated, Title 43, Chapters 34 and 34A (O.C.G.A. Section 43-34-39 provides that the state medical board, in addition to any other remedy or criminal prosecution (emphasis added), may file a complaint to the superior court and seeking a restraining order and an injunction against any person, firm, company, partnership, association, or corporation or the agent, officer, or director of such firm, company, partnership, association, or corporation who is or has been violating any state law relating to the practice of medicine. Call 1-800-GEORGIA to verify that a website is an official website of the State of Georgia. The Parent selects any transferee of the stock. Our state licensure and corporate practice attorneys have decades of combined experience in this unique area of the law, working with hundreds of clients to design, establish, counsel, and repair the legal structures necessary to permit non-licensed investors to establish and develop partnerships with licensed health care providers. Rul. Forming and structuring Practice Management entities, including Physician Practice Management companies, as well as Optometrist Management, Dental Management, Therapist Management, and Veterinarian Management. La. But even states that abide by the Corporate Practice of Medicine doctrine might have allowable exceptions. Further to the guiding/non-exhaustive lists provided above, in these cases, there must be a clear distinction between who is providing professional services and who is providing the management services. Again, regulatory authorities have a lot of enforcement discretion. Seeking the advice of knowledgeable and experienced professionals is imperative before taking any such steps. The MSO model allows non-MD (non-physician) entrepreneurs to create a robust business model for the healthcare venture in which they do not partner or share professional fees with the medical doctors, but rather take an MSO or management fee in exchange for their management and marketing efforts. Most states do not allow you, a licensed professional, to facilitate what is, in effect, the unlicensed practice of medicine/ podiatry. When evaluating the various legal and regulatory hurdles associated with telehealthsuch as licensure, reimbursement, and privacy one hurdle that often goes overlooked is the corporate practice of medicine. A good healthcare lawyer will work with your healthcare venture to help structure the business model so as to help mitigate regulatory risk. The Corporate Practice of Medicine (CPM) doctrine continues to befuddle, beleaguer, and bewilder healthcare companies seeking to venture with physicians and non-physician entrepreneurs. About The Georgia Composite Medical Board, Frequently Asked Questions About The Board, Frequently Asked Questions about Complaints, Nurse Protocol Agreements Reviewed by the Board, Prescription Drug Monitoring Program (PDMP), Continuing Education and Other Required Training for Physicians. 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