The 20-Step Checklist for Ensuring Compliance with the Corporate Practice of Medicine (CPOM) Doctrine

Introduction

This comprehensive checklist is crafted to help healthcare businesses navigate the requirements of the Corporate Practice of Medicine (CPOM) doctrine. Staying compliant with CPOM laws is essential to avoid legal risks and ensure smooth operations. Following these 20 steps, you can systematically address all aspects of CPOM compliance and protect your practice from potential legal issues.

Let’s begin.

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Stay organized and compliant with our comprehensive guide

Table of Contents

  1. Verify State-Specific CPOM Laws and Regulations
  2. Identify Key Stakeholders and Their Roles
  3. Determine If Your Healthcare Business Structure Requires Physician Ownership
  4. Set Up or Verify Existing Professional Corporation (PC) Structures
  5. Establish a Clear Separation Between Clinical and Administrative Functions
  6. Draft Management Services Agreements (MSAs) with Legal Experts
  7. Review MSAs to Ensure Compliance with CPOM Laws
  8. Define the Roles and Responsibilities of Physician Owners
  9. Define the Roles and Responsibilities of Non-Physician Staff
  10. Ensure Clinical Protocols Comply with State and Federal Regulations
  11. Implement Internal Controls to Monitor CPOM Compliance
  12. Conduct Regular Compliance Audits
  13. Train Staff on CPOM Compliance Requirements
  14. Engage with Experienced Attorneys for Corporate Compliance and Entity Management
  15. Integrate Trusted Partners for Credentialing, Billing, and Accounting
  16. Set Up a System for Continuous Monitoring of Legal Developments
  17. Regularly Update Compliance Procedures Based on New Laws
  18. Review and Adjust MSAs Periodically
  19. Document All Compliance Activities and Audits
  20. Establish a Communication Plan for Addressing Compliance Issues
Step 1: Verify State-Specific CPOM Laws and Regulations Research and document the specific CPOM laws and regulations applicable in your state. Understanding these rules is the foundation for ensuring compliance in your healthcare business.
Step 2: Identify Key Stakeholders and Their Roles Identify all key stakeholders in your healthcare business, including physicians, administrative staff, and legal advisors. Clearly define their roles in the context of CPOM compliance.
Step 3: Determine If Your Healthcare Business Structure Requires Physician Ownership Evaluate whether your business structure needs physician ownership to align with state laws. This step is critical in ensuring that your business model is in accordance with CPOM requirements.
Step 4: Set Up or Verify Existing Professional Corporation (PC) Structures If your state requires it, establish a Professional Corporation (PC) or review your existing PC to ensure it meets current legal standards. This structure is often necessary for CPOM compliance.
Step 5: Establish a Clear Separation Between Clinical and Administrative Functions Create a clear division between clinical and administrative functions in your business. This separation is essential to comply with CPOM laws, which often prohibit non-physicians from influencing clinical decisions.
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Collaborate with experts to draft precise and compliant MSAs.
Step 6: Draft Management Services Agreements (MSAs) with Legal Experts Work with legal experts to draft MSAs that define the relationship between your Professional Corporation and any non-physician-owned entities. These agreements must be carefully crafted to comply with CPOM laws.
Step 7: Review MSAs to Ensure Compliance with CPOM Laws Regularly review your MSAs to ensure they remain compliant with evolving CPOM regulations. This step is vital to maintaining legal protection for your practice.
Step 8: Define the Roles and Responsibilities of Physician Owners Clearly define and document the roles and responsibilities of physician owners in your practice. This ensures they have the appropriate authority and accountability in clinical matters, which aligns with CPOM requirements.
Step 9: Define the Roles and Responsibilities of Non-Physician Staff Similarly, clearly define and document the roles and responsibilities of non-physician staff, ensuring that they do not infringe on clinical decision-making, which is reserved for licensed physicians.
Step 10: Ensure Clinical Protocols Comply with State and Federal Regulations Review all clinical protocols to confirm that they comply with both state and federal regulations. This includes guidelines for patient care, prescribing practices, and other clinical activities.
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Set up continuous monitoring to stay updated on legal developments.
Step 11: Implement Internal Controls to Monitor CPOM Compliance Establish internal controls and procedures to monitor compliance with CPOM laws continuously. This could include setting up a compliance officer or committee responsible for regular reviews.
Step 12: Conduct Regular Compliance Audits Schedule and conduct regular audits to assess your compliance with CPOM laws. These audits should be thorough and cover all aspects of your practice’s operations.
Step 13: Train Staff on CPOM Compliance Requirements Provide ongoing training for all staff members on CPOM compliance. This training should cover the importance of compliance, their specific roles, and how to report potential issues.
Step 14: Engage with Experienced Attorneys for Corporate Compliance and Entity Management Work closely with attorneys who specialize in CPOM and corporate compliance. Their knowledge is crucial in navigating complex legal requirements and protecting your practice.
Step 15: Integrate Trusted Partners for Credentialing, Billing, and Accounting Partner with trusted service providers for credentialing, billing, and accounting. Ensure these partners understand and comply with CPOM requirements, as their services are integral to your practice’s operations.
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Monitor CPOM compliance effectively with internal controls.
Step 16: Set Up a System for Continuous Monitoring of Legal Developments Establish a system to monitor changes in CPOM laws and regulations continuously. Staying informed allows you to adjust your compliance practices promptly and effectively.
Step 17: Regularly Update Compliance Procedures Based on New Laws Regularly review and update your compliance procedures in response to new legal developments. This ensures your practice remains aligned with the latest CPOM requirements.
Step 18: Review and Adjust MSAs Periodically Periodically review and, if necessary, adjust your Management Services Agreements to reflect any changes in CPOM laws or your practice’s operations. This step is vital for maintaining compliance.
Step 19: Document All Compliance Activities and Audits Keep detailed records of all compliance activities, including audits, staff training, and communications with legal advisors. Documentation is critical to demonstrating your commitment to compliance if ever questioned by regulators.
Step 20: Establish a Communication Plan for Addressing Compliance Issues Develop a clear communication plan for addressing any compliance issues that arise. This plan should include how to report problems, who to contact, and the steps to resolve them quickly and effectively.
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Conclude your compliance journey with confidence and collaboration.

Breaking Everything Down

Following this 20-step checklist ensures that your healthcare business complies with the Corporate Practice of Medicine doctrine. Compliance is ongoing, and staying vigilant is critical to protecting your practice. If you have any questions or need further guidance, don’t hesitate to contact an expert.

Frequently Asked Questions

What is the Corporate Practice of Medicine (CPOM) Doctrine?

The Corporate Practice of Medicine (CPOM) Doctrine is a legal principle in many U.S. states restricting non-physicians or corporations from practicing medicine or employing physicians to provide medical services. This doctrine ensures that medical decisions are made by licensed professionals, free from corporate influence.

Why is CPOM compliance substantial for healthcare businesses?

Compliance with CPOM is necessary to avoid severe legal consequences, including fines, loss of licenses, and potential lawsuits. Adhering to CPOM laws protects your practice and ensures that healthcare decisions remain in the hands of qualified medical professionals.

How often should we conduct compliance audits?

It’s recommended that compliance audits are conducted regularly, at least annually, to ensure that your practice continues to meet all CPOM requirements. However, the frequency may vary depending on the size and structure of your practice.

Can non-physicians have any role in a healthcare business under CPOM laws?

Yes, non-physicians can have roles in a healthcare business, but their involvement is typically restricted to non-clinical functions, such as administrative, financial, or operational duties. They should not influence clinical decisions or patient care.

What would happen if CPOM laws changed in my state?

If CPOM laws change in your state, it’s essential to promptly review and update your compliance procedures to align with the new regulations. Staying informed about legal developments is critical to maintaining compliance.

How can I find an attorney experienced in CPOM compliance?

You can find attorneys specializing in CPOM compliance by searching for healthcare law firms with experience in your state’s specific regulations. It’s advisable to seek recommendations from professional networks or consult with state medical boards.

What are Management Services Agreements (MSAs), and why are they important?

Management Services Agreements (MSAs) are contracts that define the relationship between a healthcare entity and a management company that provides administrative services. These agreements help maintain the required separation between clinical and non-clinical functions.

Are there any federal regulations related to CPOM, or is it purely state-based?

CPOM is primarily governed by state law, but federal regulations, such as the Stark Law and Anti-Kickback Statute, also influence the structure of healthcare practices and their relationships with physicians. It’s essential to consider both state and federal laws in your compliance efforts.

What should I include in the documentation of compliance activities?

Documentation should include records of compliance audits, staff training sessions, procedure updates, communication with legal advisors, and any actions taken to address compliance issues. Thorough documentation is essential for demonstrating your commitment to CPOM compliance if ever questioned by regulators.

What are the risks of non-compliance with CPOM laws?

Non-compliance with CPOM laws can result in significant penalties, including monetary fines, legal action, and damage to your practice’s reputation. In severe cases, non-compliance can lead to the revocation of your license to operate.

Can CPOM compliance be managed internally, or is external help necessary?

While some aspects of CPOM compliance can be managed internally, seeking external legal expertise is highly recommended to ensure that all regulations are thoroughly understood and properly implemented. External audits and legal reviews provide an additional layer of protection.

How can I stay updated on changes in CPOM laws?

Staying updated on CPOM laws can be achieved by subscribing to legal newsletters, joining professional healthcare associations, attending relevant conferences, and maintaining regular contact with legal advisors specializing in healthcare law.

Is there a difference between CPOM compliance for different types of healthcare practices?

Yes, CPOM compliance can vary depending on the type of healthcare practice (e.g., solo practice, group practice, telemedicine). Each type may have specific requirements under state law, so it’s important to tailor your compliance efforts accordingly.

Glossary

Compliance: The act of following legal regulations, guidelines, and standards set by governing bodies. In the context of CPOM, it refers to adhering to state and federal laws that regulate the practice of medicine by healthcare entities.

Professional Corporation (PC): A specific type of legal entity in which licensed professionals, such as doctors, provide their services. PCs are often required by state law to meet CPOM regulations, ensuring that only licensed physicians own and control medical practices.

Management Services Agreement (MSA): A contract between a healthcare practice (often a Professional Corporation) and a management company that provides administrative services. MSAs define the relationship and responsibilities between the two entities, ensuring that non-physicians do not control clinical decisions.

Clinical Protocols: Established guidelines and procedures that healthcare providers follow in the treatment of patients. These protocols are in place to make sure that patient care meets the required medical and ethical standards.

Audit: A systematic review and assessment of business processes and compliance with legal regulations. In the context of CPOM, an audit refers to the regular examination of a healthcare practice’s adherence to CPOM laws.

Stark Law: A federal law that prohibits physician self-referral, particularly where a physician refers a patient to a medical facility in which they have a financial interest. This law is important in regulating relationships within healthcare practices and compliance with federal laws.

Anti-Kickback Statute: A federal law that prohibits the exchange of remuneration for referrals for services that are paid for by a federal healthcare program. This statute significantly impacts how healthcare practices structure relationships and financial arrangements.

Legal Advisor: A professional, typically an attorney, who provides guidance on legal matters. For CPOM compliance, a legal advisor is essential for understanding and following both state and federal laws.

Credentialing: The process of verifying the qualifications and licenses of healthcare professionals. Proper credentialing is necessary for compliance with both state and federal laws and ensures that healthcare providers meet the required standards.

Billing: The process of submitting and following up on claims with health insurance companies to receive payment for services provided by healthcare providers. Accurate billing practices are vital for legal compliance and the financial stability of a healthcare practice.

Compliance Officer: An individual responsible for overseeing and managing compliance within an organization, ensuring that it adheres to regulatory requirements. In healthcare, this role involves monitoring CPOM compliance and other legal obligations.

Federal Regulations: Laws and rules established by the federal government that govern various aspects of healthcare practices, including relationships between physicians and entities like hospitals or management companies.

Documentation: The process of recording and maintaining records of compliance activities, including audits, training, and communications. Proper documentation is crucial for proving compliance with CPOM and other regulatory requirements.

State Regulations: Laws and rules established by state governments that govern the practice of medicine within their jurisdiction. These regulations can vary widely from state to state and are a critical aspect of CPOM compliance.

Healthcare Entity: Any organization that provides medical services, such as hospitals, clinics, or private practices. Healthcare entities must comply with both state and federal regulations, including CPOM laws.

Legal Developments: Changes or updates in laws and regulations that impact the operation of businesses, including healthcare practices. Staying informed of legal developments is essential for maintaining compliance.

Non-Physician Staff: Employees of a healthcare practice who are not licensed to practice medicine. Their roles are typically administrative or operational, and they must not influence clinical decisions to comply with CPOM regulations.

Physician Ownership: The requirement that a medical practice must be owned by licensed physicians, as dictated by CPOM laws in many states. This ensures that medical decisions remain under the control of those qualified to make them.

State Medical Board: A regulatory body at the state level responsible for licensing and overseeing the practice of medicine. The state medical board enforces CPOM laws and ensures that healthcare practices operate legally.

Separation of Functions: The clear distinction between clinical and administrative roles within a healthcare practice. This separation is necessary to comply with CPOM laws and prevent non-physicians from influencing medical decisions.

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What Next?

If you’re ready to take the next step in keeping your healthcare business compliant with state laws and regulations, ProMed Preferred is here to assist. Our team of US-licensed and board-certified physicians specializes in setting up and maintaining Professional Corporations (PCs) that meet all necessary legal requirements. We also offer help with Management Services Agreements (MSAs), insurance credentialing, billing, and more through our trusted partners. 

Don’t leave your compliance to chance—partner with experts who understand the requirements of the Corporate Practice of Medicine (CPOM) doctrine. Register now to secure your practice’s future: https://www.promedpreferred.com/registration-form/.