Corporate Practice of Medicine: 50-State Guide (2026)

The corporate practice of medicine (CPOM) doctrine limits who can own a medical practice and who can control how medicine is practiced. As of October 2026, about a dozen states enforce it strongly (California, Texas, New York, New Jersey, Illinois, Oregon and others), most of the rest recognize it in a moderate or unsettled form, and a minority have no general bar on lay ownership. The rule that matters is the one in the state where the patient is, not where your company is incorporated. So a non-physician founder who serves patients in more than a handful of states almost always ends up using the same structure everywhere: a management services organization (MSO) the founder owns, paired with a physician-owned professional corporation (PC) that delivers care, known as the friendly PC-MSO model. This guide sorts every state by enforcement level, links to a dedicated guide for each, and explains what the classification means for med spas, NP- and PA-led practices, and telehealth brands.

This is general information, not legal advice. Confirm the current rules with a healthcare attorney licensed in each state you serve. Last reviewed October 2026. State rules change often; statute and case references are summaries, not quotations.

Key takeaways

The corporate practice of medicine doctrine bars or limits lay (non-physician) ownership of medical practices and lay control over clinical decisions, and its strength varies widely by state.
CPOM rules apply based on where the patient receives care, so a telehealth brand must account for every state its patients live in, not only its home state.
The friendly PC-MSO model, in which a founder-owned MSO provides non-clinical services to a physician-owned PC under a management services agreement, is the standard way non-physicians own healthcare businesses in CPOM states.
Fee-splitting rules in several states make percentage-of-revenue management fees risky, so conservative structures use flat or fair-market-value fees.
Recent laws, notably Oregon SB 951 (2025) and California SB 351 (2025), signal that regulators are now policing how much operational control an MSO actually exercises, not just what the contracts say.

What is the corporate practice of medicine doctrine?

CPOM grew out of state medical practice acts and early court decisions holding that only licensed individuals may practice medicine, and that a corporation (which cannot hold a license) cannot practice medicine by employing physicians. Its purpose is to keep commercial interests from overriding a physician's clinical judgment.

In practice, CPOM shows up in four ways:

Ownership limits. Only licensed physicians (and sometimes other listed licensees) may own a professional corporation or PLLC that provides medical services.
Employment limits. A general business corporation may not employ physicians to provide care, with exceptions that commonly cover hospitals, HMOs, certain nonprofits and academic institutions.
Control limits. Even where ownership is allowed, a lay entity may not control clinical decisions: diagnosis, treatment, prescribing, clinical staffing and standards of care.
Fee-splitting rules. Many states bar physicians from sharing professional fees with non-licensees, which affects how an MSO can be paid.

States enforce the doctrine through statutes, medical board rules and position statements, attorney general opinions, and case law. Some states have all four; some have none. For the mechanics of the structure itself, read the friendly PC-MSO model explained.

How strictly does each state enforce CPOM?

We group states into four tiers. The tier is a planning shorthand, not a legal conclusion; each state guide explains the basis and the exceptions.

Strong (12): California, Colorado, Illinois, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, North Dakota, Oregon, and Texas. Lay ownership of a medical practice is prohibited by statute, case law or a consistent board position, and the state actively polices control. Expect to need a physician-owned PC and a carefully drafted management services agreement.

Moderate (16): Arizona, Arkansas, Connecticut, Indiana, Iowa, Kansas, Maryland, Minnesota, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Washington, West Virginia, and Wisconsin. The doctrine is recognized but with meaningful exceptions or less consistent enforcement. A PC-MSO is still the conservative choice for most non-physician founders.

Limited or unsettled (10): District of Columbia, Georgia, Hawaii, Idaho, Kentucky, Louisiana, Mississippi, Montana, Ohio, and Vermont. The doctrine is narrow, inconsistently applied, or the legal position is unclear. Structure conservatively until the rules settle.

None (13): Alabama, Alaska, Delaware, Florida, Maine, Missouri, Nebraska, New Hampshire, New Mexico, Oklahoma, Utah, Virginia, and Wyoming. No general bar on lay ownership has been identified. Watch for other rules that still apply, such as clinic licensure (Florida's Health Care Clinic Act is the best-known example), fee-splitting, and the requirement that only licensed providers make clinical decisions.

CPOM, NP practice authority and telehealth licensing in every state

State	CPOM enforcement	NP practice authority	Out-of-state telehealth licensing	State guide
Alabama	None	Reduced	Limited	Alabama CPOM guide
Alaska	None	Full	Limited	Alaska CPOM guide
Arizona	Moderate	Full	Yes	Arizona CPOM guide
Arkansas	Moderate	Reduced	No	Arkansas CPOM guide
California	Strong	Restricted	No	California CPOM guide
Colorado	Strong	Full	Yes	Colorado CPOM guide
Connecticut	Moderate	Full	No	Connecticut CPOM guide
Delaware	None	Full	Yes	Delaware CPOM guide
District of Columbia	Limited or unsettled	Full	Unverified	District of Columbia CPOM guide
Florida	None	Restricted	Yes	Florida CPOM guide
Georgia	Limited or unsettled	Restricted	Yes	Georgia CPOM guide
Hawaii	Limited or unsettled	Full	No	Hawaii CPOM guide
Idaho	Limited or unsettled	Full	Limited	Idaho CPOM guide
Illinois	Strong	Reduced	Limited	Illinois CPOM guide
Indiana	Moderate	Reduced	No	Indiana CPOM guide
Iowa	Moderate	Full	No	Iowa CPOM guide
Kansas	Moderate	Full	Yes	Kansas CPOM guide
Kentucky	Limited or unsettled	Reduced	No	Kentucky CPOM guide
Louisiana	Limited or unsettled	Reduced	Yes	Louisiana CPOM guide
Maine	None	Full	Limited	Maine CPOM guide
Maryland	Moderate	Full	No	Maryland CPOM guide
Massachusetts	Strong	Full	No	Massachusetts CPOM guide
Michigan	Strong	Restricted	No	Michigan CPOM guide
Minnesota	Moderate	Full	Yes	Minnesota CPOM guide
Mississippi	Limited or unsettled	Reduced	Yes	Mississippi CPOM guide
Missouri	None	Restricted	No	Missouri CPOM guide
Montana	Limited or unsettled	Full	No	Montana CPOM guide
Nebraska	None	Full	No	Nebraska CPOM guide
Nevada	Strong	Full	Yes	Nevada CPOM guide
New Hampshire	None	Full	No	New Hampshire CPOM guide
New Jersey	Strong	Reduced (2026 law adds an independent-practice path)	No	New Jersey CPOM guide
New Mexico	None	Full	Yes	New Mexico CPOM guide
New York	Strong	Full	No	New York CPOM guide
North Carolina	Strong	Restricted	No	North Carolina CPOM guide
North Dakota	Strong	Full	Limited	North Dakota CPOM guide
Ohio	Limited or unsettled	Reduced	Limited	Ohio CPOM guide
Oklahoma	None	Restricted	Limited	Oklahoma CPOM guide
Oregon	Strong	Full	Yes	Oregon CPOM guide
Pennsylvania	Moderate	Reduced	Limited	Pennsylvania CPOM guide
Rhode Island	Moderate	Full	No	Rhode Island CPOM guide
South Carolina	Moderate	Restricted	Limited	South Carolina CPOM guide
South Dakota	Moderate	Full	No	South Dakota CPOM guide
Tennessee	Moderate	Restricted	No	Tennessee CPOM guide
Texas	Strong	Restricted	No	Texas CPOM guide
Utah	None	Full	Limited	Utah CPOM guide
Vermont	Limited or unsettled	Full	Yes	Vermont CPOM guide
Virginia	None	Restricted	No	Virginia CPOM guide
Washington	Moderate	Full	Limited	Washington CPOM guide
West Virginia	Moderate	Reduced	Yes	West Virginia CPOM guide
Wisconsin	Moderate	Reduced (2025 law adds an independent-practice path)	Limited	Wisconsin CPOM guide
Wyoming	None	Full	No	Wyoming CPOM guide

NP practice authority follows the American Association of Nurse Practitioners' (AANP) state practice environment categories: Full, Reduced or Restricted. Out-of-state telehealth licensing summarizes whether a state offers a telehealth registration or special license for providers licensed elsewhere ("Yes"), narrow exceptions ("Limited"), or requires a full state license ("No"). Interstate compacts are separate and covered in our telehealth licensing by state guide.

Who can own a medical practice in a CPOM state?

In a strong CPOM state, the practice entity itself is owned by one or more physicians licensed in that state, usually through a professional corporation or professional LLC. The founder owns the MSO. The MSO provides everything non-clinical: brand, technology, marketing, billing, facilities, non-clinical staff and capital. A management services agreement sets the services and the fee, and a stock transfer restriction (succession) agreement gives the MSO a say in who replaces the physician owner, without giving it control over clinical decisions.

The documents behind the structure are covered in our management services agreement guide, and the fee question, including fair market value and fee-splitting, in MSO management fees explained.

Can nurse practitioners and PAs own a practice?

It depends on two separate rules: the state's NP or PA scope-of-practice rules, and its CPOM and professional-entity rules. Full practice authority lets an NP practice without a collaborating physician, but it does not automatically let the NP own an entity that employs physicians. Many states let NPs own their own nursing practice while still limiting ownership of a medical practice to physicians. PAs almost always practice under a supervision or collaboration agreement, though several states have moved toward collaborative models. Our guide to whether nurse practitioners and PAs can own a practice covers all 51 jurisdictions, and our collaborating physician guide covers finding one.

What does CPOM mean for a telehealth brand?

A telehealth brand practices medicine wherever its patients are. If you serve all 50 states from a company in Florida, you are subject to California's CPOM rules for every California patient, Texas's for every Texas patient, and so on. That has three consequences:

One structure, everywhere. Building a different structure per state is expensive and fragile. Most multi-state brands use a friendly PC-MSO across the board, with PC registrations where states require them.
Licensure is a separate problem. CPOM decides who owns the practice; licensure decides who may treat the patient. Each provider needs a license (or a registration or compact privilege) in the patient's state.
Marketing is clinical evidence. Ads that promise a specific medication imply that someone other than the provider decides treatment. Regulators read marketing as evidence of who is really in control.

Our existing corporate practice of medicine and MSO model guide for telehealth covers the telehealth-specific issues in more depth, and the telehealth MSO companies comparison compares the vendors that supply the structure.

How are states changing their CPOM rules?

The trend since 2024 is toward tighter scrutiny of MSOs, especially private-equity-backed ones:

Oregon SB 951 (2025) restricts MSOs and their affiliates from owning or controlling the medical practices they manage and lists decisions an MSO may not control. See the Oregon guide.
California SB 351 (2025) bars private equity groups and hedge funds involved with physician practices from interfering with clinical judgment, and AB 1415 (2025) extends California's health care transaction notice requirements to MSOs. See the California guide.
Transaction-notice laws in several states, including New York, Illinois, Minnesota and others, require advance notice of certain health care transactions, and some reach MSO arrangements.

If you are forming a structure in 2026, design it so the physician owner's independence is real in daily operations, not only in the contract.

Frequently asked questions

Which states have the strongest corporate practice of medicine laws?

As of October 2026, California, Texas, New York, New Jersey, Illinois, Oregon, Colorado, Massachusetts, Michigan, Nevada, North Carolina and North Dakota are generally treated as strong CPOM states. In these states a non-physician should not own a medical practice directly and typically uses a friendly PC-MSO structure.

Can a non-physician own a medical practice?

In states with no general CPOM bar, often yes, subject to clinic licensure and other rules. In CPOM states, a non-physician can own the business side through a management services organization, while a licensed physician owns the professional entity that delivers care.

Does CPOM apply to telehealth?

Yes. CPOM applies based on where the patient is located, so a telehealth company is subject to the rules of every state where it treats patients, regardless of where the company is incorporated.

Do I need a friendly PC-MSO in a state without CPOM?

Not always, but many multi-state brands use one structure everywhere because it is simpler to operate and audit, and because states without CPOM may still have fee-splitting, clinic licensure or other rules that a PC-MSO structure handles cleanly.

Can a nurse practitioner own a medical practice?

It depends on the state. Full practice authority lets an NP practice independently, but ownership of an entity that employs physicians is governed separately by the state's CPOM and professional entity rules.

How often do CPOM rules change?

Frequently. Several states passed or proposed MSO and health care transaction laws in 2025 and 2026. Review your structure at least annually and before entering a new state.

Sources

Build your structure once, for every state

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