You’re building a digital health company. You’re shaping your care model, assembling your team, and preparing to launch. But then your legal team drops four letters into the conversation: CPOM.

The Corporate Practice of Medicine (CPOM) doctrine has become one of the most confusing, misunderstood, and high-stakes hurdles facing digital health startups. CPOM can feel like a barrier to innovation, especially for those without a background in healthcare law. But ignoring it, or underestimating it, can lead to fines, license revocations, or regulatory shutdowns.

The good news? CPOM isn’t insurmountable. With the right structure, strategy, and support, you can operate compliantly while focusing on what matters most: delivering great care.

In this article, we break down what CPOM means for your healthcare organization or digital health startup, how to navigate it across states, and why structuring early is key to compliant growth.

What Is CPOM?

CPOM doctrine prohibits non-physician entities—including corporations, tech companies, and investors—from directly owning or controlling a medical practice.

The intention of CPOM law is to keep clinical decisions in the hands of licensed medical professionals, free from corporate or financial influence. But its implementation is anything but simple, because CPOM laws vary widely from state to state.

In strict CPOM states like California, Texas, and New York, only physicians (or physician-owned Professional Corporations, known as PCs) can legally employ other clinicians or bill for medical services. That creates a problem for startups built around non-physician leadership, capital, or infrastructure.

Why CPOM Matters for Digital Health Startups

Let’s say your platform connects patients with nurse practitioners, supports virtual visits, or handles billing and operations. If your company is profiting from the delivery of medical services and you’re not structured appropriately under CPOM, you may be in violation of state law.

Common CPOM triggers include:

Employing physicians or APPs directly through a non-clinician-owned entity
Controlling clinical protocols, staffing, or scheduling decisions
Sharing in revenue tied directly to clinical services
Advertising under a brand name that isn’t tied to a physician-owned PC

For new healthcare organizations, these risks often hide in plain sight. But state regulators don’t take them lightly, and neither do future investors or acquirers. Operating out of compliance can jeopardize your business model and your long-term viability.

The PC-MSO Model: Your Key to CPOM Compliance

How do non-physician founders build a legally compliant, scalable care model?

Enter the PC-MSO model—the standard structure for CPOM compliance across digital health.

The Professional Corporation (PC) is owned and controlled by licensed physicians. This entity is responsible for all clinical care and decision-making.
The Management Services Organization (MSO) is your business entity. It provides non-clinical services—technology, marketing, staffing, billing, facilities—in exchange for a fair market management fee.

This arrangement ensures that the clinical side of the business remains in physician hands, while the non-clinical infrastructure and business strategy stay with the company and its investors.

The PC-MSO model is a legal framework that allows innovation and clinical integrity to coexist.

CPOM Isn’t One-Size-Fits-All: Why State Law Matters

Here’s where it gets trickier: not all states define or enforce CPOM the same way.

Strict CPOM states (like California, Texas, and New York) tightly restrict non-physician control of medical services.
Moderate states (like Illinois or Colorado) allow more flexibility but still require careful structuring and documentation.
Relaxed CPOM states (like Florida or Nevada) impose fewer restrictions, though other laws still apply.

If you’re delivering care in multiple states, you’ll need a state-by-state strategy. It’s not something to patch together with templates and hope. It requires experience, legal fluency, and operational support.

What Healthcare Companies Get Wrong About CPOM

Some founders learn about CPOM after they’ve launched. Others hear about the PC-MSO model and assume they can DIY their way to compliance. But here’s where startups most often go wrong:

“We’ll set up the PC later.” If you’re already delivering care, billing for services, or marketing your clinical offering, you may already be out of compliance.
“Our general counsel can handle this.” Healthcare regulatory law is highly specialized. Even excellent in-house legal teams can lack the nuanced, state-specific expertise CPOM requires.
“We’ll just use boilerplate agreements.” Off-the-shelf templates won’t hold up under audit, or scale with you. Your MSAs, ownership structure, and compliance policies need to be custom-built.

The earlier you get this right, the smoother your growth and operational scale will be.

How Zivian Health Helps Startups Navigate CPOM

At Zivian Health, we help digital health startups move fast without breaking compliance.

Our PC ownership and MSO structuring services are designed for startups expanding across states, growing clinical teams, or preparing for due diligence. We support you with:

Finding an experienced physician PC owner and PC-MSO setup in strict CPOM states
Customized MSO structuring and Management Services Agreements (MSAs)
Ongoing PC operations support, including physician onboarding, board filings, and compliance monitoring
A secure platform to manage clinical oversight, collaboration protocols, and audit trails

We’ve supported healthcare organizations of all sizes, and we’re built to grow with you.

Final Thoughts: Build for Growth, Not Headaches

CPOM is a modern reality of healthcare delivery. And the companies that take it seriously from day one are the ones that win investor and industry trust, attract clinical talent, and expand with confidence.

If you’re a digital health founder or clinical operator building in healthcare, don’t leave compliance to chance. Structure your care model for the future so you can scale without looking over your shoulder.

Ready to explore PC-MSO structuring or physician ownership in your target states? Zivian Health is here to help you grow the right way. Connect with our team today to get started.

Navigating CPOM as a Digital Health Startup: What You Need to Know