Understanding the Corporate Practice of Medicine (CPOM) Doctrine for Non-Physician Buyers in Texas
If you’re a non-physician entrepreneur or investor wanting to enter Texas’s healthcare space, you’ve likely seen the term Corporate Practice of Medicine (CPOM). It may be a confusing doctrine at first. But, you must understand it to succeed in Texas’s healthcare business.
So, what’s CPOM all about, and how does it impact non-physician buyers in Texas? Let’s break it down.
What Is the Corporate Practice of Medicine?
The Corporate Practice of Medicine is a legal rule. It says: “Hey, non-doctors, you can’t own or control a medical practice.””
This doctrine is designed to keep the medical field focused on what’s best for patients, not profits. Texas limits ownership to licensed physicians. This keeps clinical decisions with qualified medical professionals. It prevents businesspeople from influencing them to hit revenue targets.
Sounds straightforward, right? Well, like most things in business law, there are some nuances to consider.
How CPOM Works in Texas
Texas is one of the states that takes CPOM seriously. Here, non-physicians can’t directly own or operate a medical practice. You can’t hire doctors to treat patients. Nor can you meddle in their medical decisions.
But don’t worry—there’s still a way to invest or participate in the healthcare sector without violating the law. Enter Management Services Organizations (MSOs).
The MSO Model: Your Key to Compliance
If you’re a non-physician looking to get involved, the Management Services Organizations model is your best friend. An MSO lets you handle the business side. It leaves the clinical work to licensed doctors.
Here’s how it works:
- You, the MSO, manage non-clinical operations like marketing, HR, billing, and office space.
- The physician(s) focus on patient care. They control all medical decisions.
This setup ensures compliance with CPOM laws while letting you run a profitable business in the healthcare space.
Why Texas Enforces CPOM Strictly
You might be wondering why Texas takes such a hard stance on CPOM. It boils down to protecting the integrity of the doctor-patient relationship. The state separates financial motives from medical decisions. This ensures patients get the care they need, not just the most profitable care.
For example, a non-physician owner pressures a doctor to see more patients in less time to boost profits. This could lead to rushed appointments and compromised care—exactly what CPOM laws are designed to prevent.
What Non-Physician Buyers Need to Know
If you’re serious about entering the Texas healthcare market, here are a few key takeaways:
- You Can’t Own a Medical Practice Directly But you can own or operate an MSO that provides support services to a physician-owned practice.
- Physicians must control all medical decisions. This includes patient care, diagnosis, and treatment plans. Keep your hands off!
- Beware of Fee-Splitting. Texas law bans sharing fees with non-physicians. Instead, structure MSO agreements as flat fees or fair market value compensation for services.
- Get Legal Advice Early Don’t DIY your way through CPOM compliance. Partner with a healthcare attorney who knows the ins and outs of Texas regulations.
The Upside for Non-Physicians
Sure, CPOM rules can feel restrictive, but they’re not a dealbreaker. The healthcare sector has great opportunities for non-physician investors and entrepreneurs. But, it needs the right strategy. From partnering with physicians to providing operational expertise, there’s plenty of room to make your mark—legally.
Closing Thoughts
Navigating Corporate Practice of Medicine laws in Texas can be tricky, but it’s not impossible. By knowing the rules and using models like MSOs, you can enter the healthcare space confidently and legally.
Remember, healthcare is a high-stakes industry where patient care should always come first. When you approach it with respect for the law and a focus on supporting physicians, you’re setting yourself up for long-term success.
Do you have questions about CPOM or how to structure your healthcare venture? Schedule a meeting with Dike Law Group today. We’ll show you how CPOM shouldn’t be a roadblock to your goals.