Guide to the Corporate Practice of Medicine (CPOM) in Telehealth

In the ever-evolving landscape of healthcare, telehealth transformed the way we look at medicine, offering convenience and accessibility to patients worldwide. However, as telehealth businesses strive to expand their reach and impact, they must navigate the complex terrain of healthcare regulations. 

One key aspect to consider is the Corporate Practice of Medicine (CPOM), a concept deeply intertwined with the legal and regulatory fabric of the healthcare industry. We’ll quickly review CPOM, explore its impact on telehealth and scalability and outline strategies to grow your telehealth business while staying compliant with state-specific regulations.

What is the Corporate Practice of Medicine?

At its core, the Corporate Practice of Medicine refers to the legal and ethical principle that only licensed medical professionals can practice medicine. This means that corporations or non-licensed entities are generally prohibited from employing or directly managing healthcare providers. The rationale behind CPOM is to safeguard the integrity of patient care by ensuring that medical decisions are made by qualified and licensed professionals, free from undue corporate influence.

States that follow CPOM

CPOM regulations vary from state to state, with some jurisdictions strictly adhering to this principle, while others adopt a more flexible approach. It's crucial for telehealth entrepreneurs to be aware of the states that follow CPOM to structure their business models accordingly. States such as California, Texas and New York are known for upholding CPOM regulations, while others may have more relaxed policies.

Here are a list of the current states that practice 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

How does the corporate practice of medicine affect telehealth?

Telehealth, by its nature, introduces a layer of complexity to CPOM compliance. As telehealth platforms connect patients with healthcare providers through virtual means, the traditional boundaries of medical practice can become blurred. The challenge lies in providing accessible and efficient healthcare services while adhering to the state-specific CPOM regulations.

One common concern is the potential for non-medical corporations to exert influence over medical decision-making in telehealth settings. This influence can manifest in various forms, such as financial pressures to prioritize profitability over patient care. Understanding and addressing these concerns is vital for telehealth businesses aiming to foster trust among patients, healthcare professionals and regulatory bodies.

How can I stay CPOM compliant while growing my telehealth business?

Conduct thorough regulatory research:

Before expanding your telehealth business to a new state, conduct comprehensive research on the CPOM regulations specific to that jurisdiction. Stay informed about any changes or updates in healthcare laws that may impact your operations.

Establish clear legal structures:

Work closely with legal professionals to establish a clear and compliant legal structure for your telehealth business. This may involve creating distinct entities (like Friendly PCs) for the provision of healthcare services and the management of the business, ensuring a separation that aligns with CPOM requirements.

Leverage medical directorships:

In states where CPOM is strictly enforced, consider appointing medical directors to oversee the clinical aspects of your telehealth services. These medical directors, who should be licensed in the relevant state, can help ensure that medical decisions are made by qualified professionals.

Educate and train your team:

Foster a culture of compliance within your telehealth team by providing ongoing education and training on CPOM regulations. Ensure that all staff members understand the importance of maintaining the integrity of medical decision-making and are aware of the legal implications of non-compliance.

Implement robust documentation practices:

Thorough and accurate documentation is crucial in demonstrating compliance with CPOM regulations. Implement robust record-keeping practices to track the involvement of medical professionals in decision-making processes and ensure transparency in your operations.

Engage in collaborative partnerships:

Consider forming partnerships with local healthcare providers and institutions to enhance the credibility and compliance of your telehealth business. Collaborating with established medical professionals can strengthen your position within the healthcare ecosystem and demonstrate a commitment to quality patient care.

Stay agile and adaptable:

The regulatory landscape in healthcare is dynamic, with changes occurring regularly. Stay agile and adaptable to evolving CPOM regulations, and be prepared to adjust your business practices accordingly. Regularly reassess your compliance strategies and update them to align with any new legal developments.

Successfully navigating the CPOM regulations is essential for telehealth businesses aiming to grow while maintaining compliance with state-specific regulations. By understanding the principles of CPOM, staying informed about state-specific requirements and implementing strategic compliance measures, telehealth entrepreneurs can create a solid foundation for sustainable and ethical growth. In the rapidly advancing field of telehealth, compliance with CPOM isn't just a legal requirement—it's a commitment to ensuring the highest standards of patient care and building trust in the transformative power of virtual healthcare services.

Get state-by-state regulatory and legal support

Scaling successfully requires staying compliant and adhering to industry regulations. Corporate Practice of Medicine is just one regulatory policy telehealth startups need to be aware of in the virtual care space. From HIPAA compliance to an MSO-Friendly PC structure, it is vital you lay a foundation built on regulatory adherence first and avoid future trouble.

This is where OpenLoop, your go-to telehealth support company, comes in. We offer our clients piece of mind with our regulatory and legal services. When you partner with us, we set your business up for success from the start with our proven frameworks, industry best practices and regulatory adherence—all specific to telehealth. Allowing you to focus on what matters most—seeing patients. 

Interested in how you can get started? Get in touch here!

Our full suite of white-labeled Telehealth Support Services include:

• Regulatory & Legal

• Provider Staffing

• Licensing & Credentialing

• Technology Platform

• Practice Management

• Payer Coverage & RCM

• Diagnostic Imaging