Corporate Practice of Medicine (CPOM) Guide: Colorado
This guide provides a summary of Corporate Practice of Medicine (CPOM) laws in Colorado. The CPOM doctrine is a legal framework designed to prevent business interests from interfering with medical decision-making. These laws vary by state and generally prohibit corporations and non-physicians from owning or controlling medical practices.
Read on to learn about Colorado’s CPOM doctrine, compliant business structures, and practical steps for healthcare business owners to remain compliant while practicing medicine.
Colorado CPOM Summary
Colorado enforces a strict Corporate Practice of Medicine (CPOM) doctrine, meaning that only licensed physicians can own and control medical practices. Corporations and non-licensed individuals are prohibited from practicing medicine or directing medical decisions.
Under state law, it is considered unprofessional conduct for a physician to collaborate with an unlicensed entity to provide medical services. This puts a physician’s license at risk and can invalidate the business relationship.
What Is the CPOM Doctrine?
The Corporate Practice of Medicine (CPOM) doctrine is a legal principle that prohibits corporations and non-physicians from owning or controlling medical practices. In Colorado, these laws are strict to ensure that medical decisions remain solely in the hands of licensed physicians, not influenced by business interests.
The CPOM doctrine is designed to:
Protect patient care by keeping medical decisions with trained professionals.
Prevent conflicts of interest, ensuring financial motives don’t impact medical treatment.
Maintain physician independence in clinical decision-making.
This means non-physicians cannot own, control, or employ doctors to provide medical services. The goal is to prevent business interests from overriding patient care quality.
Staying CPOM Compliant in Colorado
To stay compliant with Colorado’s CPOM laws:
Medical practices must be owned by licensed physicians using approved business structures.
Physicians must maintain full control over all medical decisions, while administrative tasks can be handled by outside entities.
Management Services Organizations (MSOs) can provide non-clinical support (billing, HR, office management), but cannot interfere with care delivery.
Clear Management Services Agreements (MSAs) should spell out the division between medical and business responsibilities.
Who Do These Laws Apply To?
CPOM restrictions apply to:
Physicians and physician assistants practicing in Colorado.
Business owners, investors, and management companies involved in healthcare operations.
Hospitals and provider networks, with limited exceptions defined by law.
Employers offering in-house medical services to their staff.
Any party involved in operating or supporting a medical practice in Colorado must follow CPOM rules to avoid legal risk.
Compliant Business Structures in Colorado
Colorado permits medical practices to operate as:
Professional Service Corporations (PCs) – 100% physician- and/or physician assistant-owned. Physician Assistants may be shareholders, but licensed physicians must be a majority of the shareholders.
Professional Limited Liability Companies (PLLCs)
Registered Limited Liability Partnerships (LLPs)
These structures must be organized solely for the practice of medicine, and only licensed professionals can be shareholders. Physician assistants may be shareholders, but physicians must maintain majority control.
Non-Compliant Business Structures in Colorado
The following are not allowed:
Corporations or individuals who are not licensed physicians owning or controlling a medical practice
“Friendly physician” models where the physician is only a figurehead and a separate entity controls operations
MSOs that influence clinical decisions or share in medical profits
Non-physicians directing or interfering in how care is delivered
Even if a structure appears compliant on paper, it may still violate CPOM laws if physicians don’t retain real control over medical care.
Consequences of CPOM Violations
Failure to comply with Colorado’s CPOM doctrine can lead to:
Disciplinary action against a physician’s license
Fines, penalties, and legal action
Reputation damage to healthcare businesses
Contracts or business arrangements being declared invalid
Colorado’s Medical Board is active in enforcement, so careful compliance is essential.
Key Takeaways
Colorado prohibits corporations from practicing medicine, requiring that licensed physicians own and control medical practices.
Physicians must not collaborate with unlicensed entities in ways that affect clinical judgment.
Professional corporations and properly structured MSOs are permitted if clinical and business functions are clearly separated.
Violating CPOM laws can result in serious legal, financial, and professional consequences.
Healthcare businesses in Colorado should consult legal experts and healthcare advisors to ensure structures comply with state law.
