cpom-compliance

# Corporate Practice of Medicine Compliance

Drafts a regulatory compliance framework ensuring lawful separation of corporate ownership from medical practice under CPOM doctrine.

## Prerequisites

Gather before drafting:

1. **Entity details** — structure, state(s) of operation, healthcare sectors (medical, dental, optometry, telemedicine, PT)
2. **Existing agreements** — MSA/MSO arrangements, physician employment contracts, governance documents
3. **Jurisdictional scope** — all states where entity operates or plans to expand
4. **Business model** — revenue structure, physician compensation methodology, admin service arrangements

## Document Structure

### 1. Introduction & Scope

- Define CPOM doctrine and application to the entity
- State jurisdictions covered
- Identify violation consequences: license revocation, contract voidability, criminal prosecution, civil fines

### 2. State-Specific CPOM Analysis

Produce a jurisdictional matrix covering: state, prohibition level (strict/moderate/permissive), key statute, exemptions, enforcement pattern.

- Limit to entity's actual operational footprint — no generic 50-state surveys unless requested
- Note sector-specific variations (telemedicine, dental, optometry, PT face different scrutiny)
- Flag recent legislative changes
- Mark uncertain citations with [VERIFY]

### 3. Compliant Organizational Structures

Compare models:

| Structure | Physician Control | Risk | Best For |
|-----------|------------------|------|----------|
| **PC/PA** | Full ownership + governance | Low | Single-state practices |
| **MSO + PC** | PC controls all clinical decisions | Low-Med | Multi-state platforms |
| **Friendly PC** | Nominal — high regulatory scrutiny | High | Avoid unless carefully structured |
| **PPM** | Shared governance | Medium | Large physician groups |

For each: governance requirements, operational boundaries, de facto control scrutiny factors, selection criteria.

**Friendly PC warning**: Never present as low-risk. Always flag for heightened scrutiny.

### 4. Management Services Agreement (MSA) Architecture

**MSO-permissible**: billing, collections, revenue cycle, non-physician HR, facility management, IT, marketing, financial reporting.

**Reserved to physician entity (non-delegable)**:

- Clinical decision-making and patient care protocols
- Physician hiring, credentialing, supervision, termination
- Fee-setting for medical services
- Patient acceptance, treatment, referral, discharge
- Quality standards and peer review

**Required MSA provisions**: FMV compensation (no clinical-outcome incentives), physician exit rights, physician final authority on clinical matters, mutual CPOM compliance obligations, FMV documentation defensible under AKS/Stark, independent audit rights.

### 5. Operational Compliance Checklist

Cover these control points with responsible party and frequency:

- Physician hiring/credentialing — PC makes all final decisions
- Clinical protocols — developed by physicians without MSO interference
- Fee setting — PC independently determines charges
- Patient care decisions — no MSO influence on acceptance, treatment, referral, discharge
- Marketing — accurately represents physician-owned nature of practice
- Board minutes — separate PC and MSO minutes documenting independent decision-making
- Approval workflows — clear audit trail showing physician authority

### 6. Training, Monitoring & Enforcement

- **Training**: physicians, admin staff, executives — governance responsibilities, authority boundaries, legal risks (onboarding + annual)
- **Monitoring**: quarterly MSA audits, annual decision-making review, annual FMV assessment, anonymous reporting channel (whistleblower-protected)
- **Enforcement escalation**: corrective action plan → structural modification → relationship termination

### 7. Risk Assessment & Mitigation

Address: regulatory penalties, contract voidability, qui tam/FCA exposure, reputational harm, discovery of violations.

Include self-disclosure decision framework: weigh severity, duration, patient harm, cooperation credit, jurisdiction-specific voluntary disclosure programs.

### 8. Conclusion & Authorization

- Reaffirm ongoing compliance obligation with annual review
- Review triggers: operational changes, new jurisdictions, legislative updates, enforcement actions
- Signature blocks: business entity rep, physician entity leadership, legal counsel, effective date + next review

## Critical Checks

- All citations must be verified for current validity; mark uncertain with [VERIFY]
- Address federal overlay (AKS, Stark Law, OIG guidance) alongside state CPOM — never analyze CPOM in isolation
- Friendly PC arrangements always flagged for heightened scrutiny
- Structure document for dual audience: legal/regulatory reviewers and operational implementers
- Reference OIG compliance program guidance and MGMA best practices where applicable