Corporate practice of medicine
laws have been around since the 1800s in Texas, which is now one of five states that continues to enforce them.
Cameron Dobbins, Survey of State Law Relating to the Corporate Practice of Medicine
, 9 THE HEALTH LAWYER, no.
The emerging emphasis on quality and the assessment models identified in this work, have increased as the corporate practice of medicine has further penetrated the healthcare marketplace (Brook 1997).
The purpose of this paper was to identify possible areas for future research related to the corporate practice of medicine and its possible impact on long-term health status.
The corporate practice of medicine doctrine generally prohibits corporations from engaging in the practice of medicine by employing physicians who provide professional services on behalf of the corporation.(73) Under this doctrine, corporations and other entities not controlled by medical professionals may not hold or otherwise exercise those rights that are vested only in licensed physicians.
In forming IPAs, the corporate practice of medicine doctrine and the employee benefits laws may conflict if the physicians members of the IPA desire to maintain employee benefits packages in addition to those of the IPA.
The corporate practice of medicine doctrine prohibits corporations from providing medical services unless the corporation is controlled by licensed physicians.(100) The doctrine therefore encourages physicians to form physician groups as professional corporations.
The policy that underlies the self-referral laws, therefore, sanctions and encourages IDS development because the IDS can enter into employment arrangements with physicians provided the IDS does not provide the physicians financial incentives to overutilize services,(110) This policy is directly in conflict, however, with the corporate practice of medicine ban(111) which hinders IDS development by preventing the IDS from employing physicians.(112) The ban has been strongly criticized as inappropriate in today's health care environment which is focused on cost containment rather than merely increasing profits through maximizing referrals.(113)
Although this structure is perhaps the safest way to avoid price-fixing exposure, ancillary legal issues may arise, including the corporate practice of medicine doctrine (discussed below) and licensing issues under state insurance or other regulatory laws.
A possible impediment to adopting an integrated, risk-sharing MCV (which is one way to avoid antitrust price-fixing issues) is the corporate practice of medicine doctrine, which goes back decades in one form or another in a number of states.
If a particular state enforces the corporate practice of medicine doctrine, MCV organizers will need to either plan around it or determine whether the benefits of forming an "integrated joint venture" outweigh the risks of violating the doctrine.
This structure is usually found in states with strong prohibitions on the corporate practice of medicine
, such as California.