Corporate Practice of Medicine (CPOM) Guide: North Carolina
This guide provides a summary of Corporate Practice of Medicine (CPOM) laws in North Carolina. 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 North Carolina’s CPOM doctrine, compliant business structures, and practical steps for healthcare business owners to remain compliant while practicing medicine.
North Carolina CPOM Summary
North Carolina strictly enforces the Corporate Practice of Medicine doctrine, which prohibits non-licensed individuals or businesses from owning or controlling medical practices. The law ensures that only licensed physicians or specific combinations of healthcare professionals can own and manage medical practices. The North Carolina Medical Board actively monitors compliance and takes enforcement actions when needed.
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 North Carolina 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 North Carolina
To operate legally under North Carolina’s CPOM rules, a medical practice must be entirely owned by licensed professionals. This includes physicians or, in some cases, a physician partnered with another permitted healthcare provider (like a nurse practitioner or optometrist, depending on the service).
Medical practices should be formed as Professional Corporations (PCs) or Professional Limited Liability Companies (PLLCs), with all shares owned by licensees. Importantly, physicians must remain actively involved in managing clinical care, not just in name or on paper.
Management Services Organizations (MSOs) may provide administrative support, but clinical control must remain with the physician owners, and management fees must not be tied to revenue or profits.
Who Do These Laws Apply To?
These laws apply to:
Physicians and physician assistants
Nurse practitioners and other advanced practice providers
Entrepreneurs and investors seeking to partner with or support medical practices
Operators of med spas, IV clinics, or elective cash-pay medical services
Any person or business involved in delivering or supporting medical services must structure operations around physician ownership and clinical independence.
Compliant Business Structures in North Carolina
Permitted structures include:
Professional Corporations (PCs) or PLLCs owned 100% by licensed professionals.
Practices jointly owned by a physician and another specific healthcare professional, where allowed by law.
MSO-PC models, where the physician-owned entity delivers care and the MSO provides non-clinical support, without influencing clinical decisions.
All documentation must clearly separate medical and business roles.
Non-Compliant Business Structures in North Carolina
The Medical Board actively investigates and penalizes non-compliant arrangements, including:
“Straw ownership” models, where a physician is the nominal owner but a non-physician controls operations.
Physicians lending their licenses without actual involvement in the practice.
MSOs taking a percentage of medical revenues or exerting control over clinical matters.
Med spas or IV clinics operated by nurses or physician assistants outside of physician-owned entities.
Physician supervision arrangements where supervision is provided to staff employed by non-licensed entities.
Even indirect involvement or weak oversight by physicians can trigger CPOM concerns.
Consequences of CPOM Violations
Violations can lead to:
Disciplinary action by the Medical Board
Revocation or suspension of medical licenses
Legal action or injunctions against unlicensed practice
Increased regulatory scrutiny of management agreements and clinic structures
A new 2024 guidance document indicates the Board is expanding enforcement, especially around physician supervision tied to non-licensed business entities.
Key Takeaways
Medical practices in North Carolina must be owned by licensed physicians or approved professional combinations.
The North Carolina Medical Board enforces CPOM laws aggressively.
MSO partnerships are allowed but must avoid any influence over clinical care.
Physicians must be genuinely involved—not just listed as owners—and must control all treatment decisions.
Med spas and similar services must operate under compliant, physician-led structures.
Healthcare businesses in North Carolina should consult legal experts and healthcare advisors, structure practices with clear roles, and ensure documentation supports physician control to avoid penalties.
