Corporate Practice of Medicine (CPOM) Guide: Iowa
This guide provides a summary of Corporate Practice of Medicine (CPOM) laws in Iowa. 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 Iowa’s CPOM doctrine, compliant business structures, and practical steps for healthcare business owners to remain compliant while practicing medicine.
Iowa CPOM Summary
Iowa follows a strict Corporate Practice of Medicine (CPOM) doctrine, which means that non-physicians and corporations generally cannot own or control medical practices. The purpose of this rule is to make sure that medical decisions are based on patient care, not business interests.
Although the doctrine isn’t spelled out in a single statute, it has been enforced through legal precedent and official opinions from the Iowa Attorney General. The Iowa Board of Medicine also supports this interpretation to protect the physician-patient 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 Iowa, 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 Iowa
To comply with Iowa’s CPOM rules:
Only licensed individuals can provide medical care, and medical practices must be structured to reflect this.
Physicians should form businesses as general corporations, professional corporations, professional LLCs, or approved partnerships where ownership and control remain with licensed professionals.
Non-physician businesses cannot employ physicians to provide care unless they fall under a specific exception, such as being a licensed health maintenance organization (HMO).
Many practices use Management Services Organizations (MSOs) to provide administrative support—like billing, scheduling, or HR—while ensuring that clinical decisions remain with the physicians.
Who Do These Laws Apply To?
These rules apply to:
Physicians and physician assistants providing care in Iowa.
Non-physician investors, entrepreneurs, or business owners seeking to partner with or employ medical professionals.
Health systems and MSOs that support medical practices.
Anyone involved in delivering, managing, or profiting from healthcare in Iowa must ensure that their business setup respects CPOM restrictions.
Compliant Business Structures in Iowa
Medical practices in Iowa can be legally structured as:
Professional Corporations (PCs) – Must be owned and operated by licensed healthcare professionals.
Professional Limited Liability Companies (PLLCs) – Permitted under Iowa law for physician ownership.
General or Limited Liability Partnerships – Also allowed, but must follow CPOM rules.
Health Maintenance Organizations (HMOs) – Specifically authorized to employ healthcare professionals under state law.
In each of these structures, only licensed individuals can control medical decision-making.
Non-Compliant Business Structures in Iowa
Business models that would violate Iowa’s CPOM rules include:
A general corporation employing physicians directly to provide care.
A management company owning or directing clinical operations of a medical practice.
Physicians practicing under an arrangement where control is effectively in the hands of non-licensed entities.
Even if the business structure looks legal on paper, if control over clinical care is not clearly in the hands of licensed physicians, it may violate CPOM standards.
Consequences of CPOM Violations
If a business violates CPOM rules in Iowa, consequences can include:
Regulatory action by the Iowa Board of Medicine
Invalidation of contracts or business arrangements
Legal liability or disciplinary action for physicians involved
Barriers to reimbursement or licensure issues
While Iowa doesn’t have statutory fee-splitting laws, physicians are still expected to follow ethical guidelines set by medical associations.
Key Takeaways
Iowa strictly prohibits corporations and non-physicians from owning or controlling medical practices.
Licensed physicians must retain full authority over clinical care, and practices should be structured accordingly.
Professional corporations, partnerships, and MSOs are allowed, but must be carefully designed to maintain physician independence.
Violating CPOM rules can result in serious legal and professional risks, including contract invalidation and disciplinary action.
Healthcare providers and entrepreneurs operating in Iowa should seek guidance from legal experts and healthcare advisors to ensure their practice or partnership is fully compliant with CPOM regulations.
