Navigating the California Corporate Practice of Medicine “CPM” Prohibition

By Paul Giancola CPM is a variation of the statutory prohibition against unlicensed practice of medicine. CPM states enforce the prohibition against corporations practicing medicine by requiring a separation between medical/clinical decisions made by physicians and business decisions made by corporations.  This generally means that physicians cannot be employed by non-medical professional corporations or LLCs absent an exception . In this regard, The California Medical Board (CMB) states that the following clinical decisions should only be made by a California-licensed physician and would constitute the unlicensed practice of medicine if performed by an unlicensed person: Determining what diagnostic tests are appropriate for a particular condition. Determining the need for referrals to, or consultation with, another physician/specialist. Determining how many patients a physician must see in a given period of time or how many hours a physician must work. Responsibility for the ultimate overall care of the patient, including treatment options available to the patient. In addition, the following “business” or “management” decisions and activities, resulting in control over the physician’s practice of medicine, should be made by a licensed California physician and not by an unlicensed person or entity: Ownership … Continue reading

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