Corporate Practice of Medicine (CPOM) Guide: New York

You probably already know that a businessperson can't practice medicine in New York without a medical license. But what happens when that businessperson wants to become your business partner instead?

That's where things get interesting.

With private equity investment, Management Services Organizations (MSOs), and increasingly creative business arrangements, the line between managing a medical practice and controlling one isn't always obvious.

New York's Corporate Practice of Medicine (CPOM) restrictions are designed to keep medical decisions in the hands of licensed professionals. But here's where physicians can get into trouble: You don't have to give someone a medical title to give them too much control over your practice.

So, where exactly is the line between a legitimate business relationship and a CPOM violation? And how do you know if your arrangement has crossed it?

RELATED: What's a MSO in Healthcare?

New York's Corporate Practice of Medicine (CPOM) Rule: Who Really Controls Your Practice?

Can a non-physician own a medical practice in New York? Under New York's Corporate Practice of Medicine (CPOM) restrictions, the straightforward answer is no.

Physicians must operate through a legally compliant business structure, typically a Professional Corporation (PC) or Professional Limited Liability Company (PLLC), with ownership restricted to appropriately licensed professionals. The New York State Education Department (NYSED) regulates professional practice entities and their ownership requirements.

But here's the thing: The entity structure usually isn't where physicians get into trouble anymore. It's what happens after the entity is formed.

With the growing popularity of Management Services Organizations (MSOs), physicians are increasingly entering into management services agreements (MSAs) that give non-clinical businesses significant influence over their practices.

And that's where the lines start to blur.

For example, what happens when your MSO requires you to provide specific clinical services as part of every patient's subscription? Is that simply a business decision, or is the MSO improperly directing medical care?

Or consider an MSO that controls your clinical staffing decisions, including who gets hired, disciplined, or fired. Even if the physician technically owns 100% of the practice, does that ownership mean much if someone else controls the people delivering patient care?

These arrangements create opportunities for undue influence over clinical judgment and potential CPOM violations.

So, how do you know whether your MSO arrangement crosses the line?

As a New York healthcare attorney, I look at two things:

1. What your Management Services Agreement actually says. Who has the contractual authority to make clinical, staffing, financial, and operational decisions?

2. How your clinical practice and MSO actually operate. Does the physician retain meaningful control in practice, or does the MSO effectively run the show?

Because when it comes to New York CPOM compliance, what's written on paper matters, but so does what happens behind the scenes.

Staying CPOM Compliant in New York: Your MSO Agreement Isn't a Set-It-and-Forget-It Document

Staying CPOM compliant in New York is an ongoing responsibility, not a checkbox you can mark off when you form your medical practice. And while your Management Services Agreement (MSA) might have been perfectly compliant when you signed it, that doesn't necessarily mean your business relationship is operating the same way today.

Here's why: Business relationships evolve, and sometimes your legal protections don't evolve with them.

Maybe your practice started offering new clinical services, but nobody thought to revisit the MSA to determine whether the management organization's responsibilities needed to change.

Or perhaps your MSO originally handled administrative tasks under the physician's direction. Over time, the management team became more comfortable making decisions independently. Now they're hiring clinical staff, setting patient scheduling requirements, or implementing operational policies without meaningful physician input.

Nobody necessarily intended to violate New York's Corporate Practice of Medicine rules. But good intentions don't make an otherwise noncompliant arrangement legal.

The question isn't just whether your MSA was compliant when you signed it. It's whether your agreement and day-to-day operations continue to preserve the physician's independent clinical judgment.

That's why I recommend revisiting your MSO relationship whenever your practice introduces new services, changes its staffing structure, or significantly expands the management organization's responsibilities.

Not Sure Whether Your MSO Arrangement Is Still Compliant?

At Edmonds Law Office, we help New York physicians evaluate their business relationships, identify compliance gaps, and understand where their agreements may expose them to unnecessary regulatory risk.

Explore our New York healthcare legal services to see how we can support your practice.

Already have an MSA but aren't sure whether it adequately protects your clinical independence? Book a Contract Clarity Call. I'll review your agreement before our session and provide a one-page action plan identifying potential issues and recommended next steps.

Why You Should Hire a New York Healthcare Lawyer

New York's Corporate Practice of Medicine rules aren't always black and white, especially when MSOs, private equity, and evolving business relationships enter the picture. As a New York healthcare lawyer, I help physicians understand their legal obligations, identify compliance risks, and structure business relationships that protect their clinical independence without getting in the way of growth.

Whether you're considering a new MSO arrangement or questioning one you already have, you don't have to figure it out alone. Explore our New York healthcare legal services to see how we can help, or book a call with Angie to discuss your specific concerns and next steps.