Corporate Practice of Medicine: An Old Doctrine Breathing New Life

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New York is one of many states that prohibit the “corporate practice of medicine” (CPOM). The CPOM doctrine generally bars a business corporation from practicing medicine or employing a physician to provide professional medical services. The doctrine has existed since the early 20th century, but its continuing vitality is evidenced not only by periodic litigation, but as well by recent scrutiny from and investigations by state regulatory agencies.

The CPOM prohibition finds its sources in the New York Education Law, which in Section 6522 states that “only a person licensed or otherwise authorized under this article shall practice medicine.” The scope of New York’s CPOM doctrine has been expanded to include “arranging for” medical services by an unlicensed corporation. For example, in State v. Abortion Information Agency, a 1972 case, the Court of Appeals found that an abortion referral agency violated the CPOM ban when it engaged physicians to perform abortions, as well as paid the hospitals, and then submitted global bills to the patients.

Originally published in the New York Law Journal on June 25, 2014.

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Topics:  Corporate Practice of Medicine, Healthcare

Published In: Health Updates, Professional Malpractice Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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