Navigating the world of healthcare isn’t just about patient care — it’s also about handling a maze of regulations. These rules encompass everything from how a healthcare organization is set up, to safeguarding patient information under laws like the Health Information Portability and Accountability Act (HIPAA), and they may be enforced by either state or federal authorities.
A particularly important aspect of this regulatory landscape is the Corporate Practice of Medicine (CPOM) doctrine. It’s a complex regulation that can easily result in legal problems if not followed accordingly. And, as the healthcare sector witnesses an influx of private equity investments, understanding and adhering to the CPOM becomes even more critical. Healthcare organizations need to be careful about their internal structures, especially concerning the roles of non-licensed individuals.
What is the Corporate Practice of Medicine?
The Corporate Practice of Medicine (CPOM) doctrine is a principle enforced in various forms across many states in the U.S. At its core, it establishes boundaries to prevent non-medical corporations from directly engaging in medical practices or employing doctors to provide such services. The idea behind this is to ensure that medical decisions are made for the best interests of patients rather than for corporate profits.
According to the American Medical Association (AMA), the Corporate Practice of Medicine doctrine was designed for many reasons, including the following concerns:
Preserving Medical Integrity
If corporations were allowed to hire physicians or directly engage in medical practices, the line between healthcare and commercial interests might blur. This could, in turn, jeopardize the genuine essence of patient care.
A doctor’s primary responsibility is to their patients. The AMA believes that physicians should be empowered to make decisions that reflect the best medical judgment for an individual patient, free from external profit-driven pressures.
Corporations are, by design, structured to prioritize shareholder interests. This fiduciary responsibility might conflict with a physician’s ethical and professional obligations to their patients.
Overview of State Corporate Practice of Medicine Laws
While the Corporate Practice of Medicine doctrine is a significant regulatory concern across the U.S., it varies widely from state to state in its enforcement, exceptions, and interpretations.
On the one hand, there are states with a high level of adherence. In California, corporations can’t directly employ physicians. Instead, medical foundations affiliated with physician groups serve as the practical solution. Also, it’s essential for marketing materials to highlight the distinction between such physician services and regular corporate hospital promotions.
The state of Texas demands that only professional entities owned by doctors can employ other physicians. That’s why Non-Profit Health Organizations (NPHOs) often come into play as a feasible alternative. This calls for a distinct differentiation between NPHOs and other corporate healthcare services in marketing content. As such, physicians’ services must be marketed distinctly from corporate entities, emphasizing the independence of medical decisions.
States like Colorado, New York, Illinois, New Jersey, Washington, and Ohio exhibit a more balanced approach to the Corporate Practice of Medicine doctrine. They have CPOM restrictions but offer exceptions, especially concerning certain entities or professional collaborations. For example, New York requires medical services to function within professional corporations or physician alliances, allowing for joint promotions. However, when it comes to marketing efforts in these states, it’s necessary to clearly distinguish between physician services and corporate involvement.
Finally, states such as Arizona, Delaware, Georgia, and more, display a mix of moderate to lenient adherence to the Corporate Practice of Medicine. Their laws come with multiple exceptions or relaxed enforcement. Here, the marketing landscape can differ significantly from one state to another. Some might permit combined promotional campaigns, while others require distinct clarifications.
The Marketing Impact of the Corporate Practice of Medicine
Marketing individual physicians is immensely important because it humanizes healthcare and builds trust. Patients research doctors that have a great reputation, that they can relate to and trust, and physician specific marketing allows for a more emotional connection to a care provider. Physician marketing differentiates the reputation, expertise, and unique qualities of each provider, giving patients the ability to choose specific care by comparing physicians reputation and ratings. This approach not only fosters patient loyalty but also differentiates a healthcare organization in a crowded market, making it stand out as a place where patients are treated as individuals, not just numbers. Ultimately, prospective patients do not select a physician based on the branding of an organization. Despite common CPOM misconceptions, physician promotion and the marketing with the intent of driving patient acquisition is completely possible with a little transparency.
With the Corporate Practice of Medicine doctrine in play, every healthcare provider has to understand how it shapes the marketing of healthcare services. Ensuring compliance while creating impactful marketing strategies is essential for both patient trust and the legal safety of your healthcare organization.
No matter if your state’s view of CPOM is strict, moderate, or lenient, the golden rule for healthcare marketing is transparency. The relationship between physicians and hospitals or any other corporate entity must be openly conveyed in all of your marketing materials. It’s equally important to state whether physicians are employed by a hospital, work in collaboration, or if they function independently. Ensuring clarity both meets the regulatory requirements and establishes trust with potential patients. In other words, transparency allows healthcare entities to market physicians and healthcare.
Healthcare is an ever-evolving field, and so are its regulations. Marketing strategies that complied with CPOM guidelines a year ago might not necessarily hold true today. To prevent potential pitfalls, you need to schedule periodic legal reviews of all marketing materials. This proactive measure can help you identify any non-compliance issues and make the necessary corrections to continue promoting healthcare services.
The Corporate Practice of Medicine doctrine, with its varied interpretations across states, undeniably poses challenges for healthcare organizations. However, with SocialClimb, you don’t have to navigate them alone.
Our comprehensive healthcare marketing platform is designed with both compliance and clarity in mind. Fully HIPAA-compliant, it safeguards your organization’s sensitive information while enabling transparent interactions with your patients. In addition to maintaining existing patient relationships, SocialClimb assists you in building new connections, ensuring you reach the right patients at the right time. Also, with our ROI measurements, you can track the impact of these efforts and make sure your strategies are effective.
While healthcare marketing might seem complex in light of evolving regulations like CPOM and HIPAA, with SocialClimb by your side, you’re equipped with the tools and insights to navigate this complex landscape while fostering trust and ensuring compliance.