Educational overview · Approx. 4 min read · illustrative, not advice
This is the page that decides whether the business you build is defensible. It is also the page where every shortcut has already been tried and documented by regulators.
The doctrine, stated plainly
The corporate practice of medicine doctrine is a body of state-level rules barring unlicensed persons and corporations from owning or controlling a medical practice, or from employing physicians to deliver clinical care. Its stated purpose is to preserve independent medical judgment from commercial interference.
It varies by state, materially. We deliberately give no count of how many states have it, because the counts circulating in this industry rest on inconsistent methodology and the leading published brief declines to state one. Anyone quoting you a confident number of CPOM states is repeating something they did not check.
Nothing on this page is legal advice. Treat it as a list of things to verify with your own counsel in the states where you intend to operate.
The standard structure
The conventional response is separation. A professional corporation or professional entity, owned by a licensed clinician, holds the clinical practice: it employs or contracts the clinicians, owns the clinical relationship with patients, and holds clinical records. A management services organisation, which may be owned by non-clinicians, provides non-clinical functions under a management services agreement: administration, scheduling infrastructure, marketing, technology, facilities, billing support, human resources.
This is well-trodden. It is also where enforcement attention lands, because the structure can be used to separate business from medicine or to disguise business control of medicine, and the paperwork looks similar in both cases.
The control test is the whole game
Enforcement risk turns on the degree of control the MSO exercises over clinical operations and professional judgment. That is the axis regulators examine, and it is examined on substance rather than on what the agreement is titled.
In practice the questions are concrete. Who decides clinical criteria for enrolling a member into a program? Who sets visit length and clinician workload? Who can hire and fire the clinicians? Who owns the clinical records? Can the MSO override a clinician's decision to decline a member? Is the management fee structured in a way that survives scrutiny, and is it defensible as fair market value for actual services?
If the answer to several of those is the non-clinical entity, the structure is a label rather than a separation, and no amount of contract drafting fixes it after the fact.
The direction of travel is tightening
State activity in 2025 moved toward tightening rather than loosening. Massachusetts enacted MSO ownership transparency requirements. Oregon, Washington and California saw CPOM-strengthening bills introduced.
Plan on the assumption that disclosure obligations increase and that structures which currently sit in grey areas get less grey. A structure built to survive scrutiny is cheaper than a structure retrofitted under it.
What this means for a licensed build
A company selling you a build cannot be your clinical entity. Atlas provides no medical services and employs no clinicians. Clinical care in an Atlas-built business sits with a separately licensed medical entity, and the relationship between your business entity and that clinical entity is one you form with your own counsel, in your state, on your terms.
That means part of what you are buying in any build is the non-clinical apparatus, and part of what you must still assemble is the clinical side. A seller who is vague about which side of that line each deliverable sits on is telling you something. Ask them to draw the line on paper, per deliverable.
Ask Atlas to put this in writing: the specific entity-formation support Atlas provides versus what the partner's own counsel must complete, itemised for the fit call
- Milbank Memorial Fund issue brief (April 28, 2025; Rooke-Ley, Reddy, Mehta, Singh, Fuse Brown) — The corporate practice of medicine doctrine comprises state-level regulations prohibiting unlicensed corporations from owning or controlling medical practices or employing physicians, intended to preserve independent medical judgment; MSOs separate business functions from clinical care and enforcement risk turns on the degree of control exercised over clinical operations; Massachusetts enacted MSO ownership transparency requirements in 2025 and Oregon, Washington and California saw CPOM-strengthening legislation introduced in 2025; the brief declines to state a count of CPOM states. (source) [VERIFIED]