What Nurse Practitioners Need to Know About Corporate Practice Of Medicine (CPOM)
If you’re a nurse practitioner (NP) opening up a new practice in a state with corporate practice of medicine (CPOM), an early misunderstanding can be costly and complicated.
As CEO of Prax Health, Meghan Jewitt often sees nurse practitioners establish businesses under the Board of Medicine, which requires a physician as a majority owner. “They’re giving up a majority of the asset they’re building and creating,” says Jewitt.
Because NPs operate under the Board of Nursing, they can establish an entity within that structure. “When it comes to setting up your own practice, if you’re a nurse practitioner, you actually have a decision to make that’s not always commonly known if you’re not working with a healthcare legal specialist,” says Jewitt.
Jewitt explains what CPOM really means for nurse practitioners, why your regulatory board matters and how to protect your ownership and autonomy while staying fully compliant.
What Is CPOM? Corporate Practice of Medicine Explained for Nurse Practitioners
Corporate Practice of Medicine (CPOM) is a rule some states use to protect patients by requiring that licensed medical professionals control medical decisions. This means a corporation or business owner can’t tell a doctor how to diagnose, prescribe or treat. Medical care remains in the hands of licensed clinicians, ensuring patient safety is protected over profit.
“These are well-intentioned structures in several states that apply to groups the Board of Medicine regulates,” says Jewitt.
The majority of states (33-34) have CPOM laws on the books, with varying degrees of strictness. California, Texas, New York and North Carolina are the most strict, while Florida, Arizona, Ohio and Illinois are the most lenient.
If you live in a state with laws on the books, understanding CPOM has practical implications for nurse practitioners. When an NP forms a professional entity regulated under the Board of Medicine, the entity is treated like a medical corporation with physician-ownership requirements.
- You become a minority owner of the practice you’re building
- Strategic decisions ultimately rest with the physician majority owner
Why CPOM Often Doesn’t Apply to Nurse Practitioners
Since CPOM falls under the Board of Medicine, it doesn’t necessarily apply to NPs. This can be confusing because physician associates (PA) do practice under the Board of Medicine. Jewitt regularly hears from NPs who receive incorrect advice about setting up their business structure, as if it were a PA.
Because NPs are regulated under the Board of Nursing, you can fully own and operate your own practice, even in a CPOM state.
The problem is when NPs aren’t told they have options.
When NPs Should Establish an Entity Under the Board of Medicine
Offering services outside your scope of practice requires you to operate under the Board of Medicine. In the case of starting a new surgical center or an oncology treatment center, for example, a genuine NP-physician partnership is necessary.
Who NPs Can and Cannot Hire Under a Board of Nursing Entity
If you choose the Board of Nursing pathway, you still have flexibility to grow a team, albeit with some important guardrails. In a nursing-regulated entity, you can hire:
- Other nurse practitioners
- Registered nurses (RNs)
- Social workers
- Registered dietitians
- Medical assistants
- Non-clinical staff such as administrative, billing and front desk staff
You can’t hire a physician or a physician associate if your entity is established under the Board of Nursing.
Can You Change Your Practice Entity if It Was Set Up Incorrectly?
It’s not simple to switch the business structure if you were misadvised early on and set up your entity under the Board of Medicine, when you could have structured it under the Board of Nursing. “It’s difficult to convert structures. That is absolutely the work of a licensed healthcare attorney,” says Jewitt.
Most likely, you’ll need to set up a new entity entirely. There may be practical barriers, such as:
- You’ll need your physician partner’s permission to wind down the business since you’re a minority owner
- You may have to navigate new names or DBAs and reestablish contracts with payors and vendor
This is why it’s critical to get the structure right from the start.
How CPOM Requirements Differ by State—and Why They’re Often Confusing
Your best chance of setting up your business structure correctly is to get help from a licensed healthcare attorney or a service like Prax. This is because even when the statutes are clear, reality inside state licensing offices can be confusing.
For example, Michigan’s laws on the books should allow NPs to own their entities independently under the Board of Nursing. However, the state licensing department has not always approved this. “Nurse practitioner businesses are denied even though the laws on the books contradict that,” says Jewitt.
In rare cases like this, NPs may have to explore:
- An MSO–PC structure that maintains NP autonomy while meeting perceived physician ownership requirements
- Other workarounds recommended by a healthcare attorney
While this conflict is the exception, not the rule, it does show how an expert can help you navigate this process.
CPOM vs. Full Practice Authority: What Nurse Practitioners Need to Know
A common point of confusion is distinguishing between full practice authority (FPA) and CPOM. “They’re not the same, but they’re orthogonal to each other,” says Jewitt.
- Full practice authority deals with supervising or collaborating physician requirements to see patients and prescribe medication
- CPOM deals with the ownership and control of your professional entity
For example, California requires NPs to have a supervising or collaborating physician until they meet specific experience and hour thresholds. At the same time, NPs in California can establish a private practice under the Board of Nursing, with the NP holding full ownership of the entity.
NP Practice Autonomy Is Expanding Nationwide
Despite the complexity of CPOM, Jewitt sees a clear trend toward deregulation as states move from restricted practice to fuller autonomy for NPs, with no sign of slowing. “It’s absolutely going to continue. NP and PA practices are only going to become more commonplace. There’s really no other option in many areas,” she says
This is by necessity as:
- Physician shortages rise
- Hospital closures or reduced hours in rural and underserved areas
- Demand for accessible, community-based care increases
4 Steps for Nurse Practitioners to Choose the Right Practice Structure
If you’re an NP thinking about starting or restructuring a practice, the following are practical steps:
- Confirm your state requirements: What does your state’s nurse practice act say about scope, collaboration and ownership?
- Define your clinical scope: Ensure these are clearly within my NP scope of practice
- Decide whether you need a physician owner: Don’t default to a Board of Medicine entity if a Board of Nursing entity would allow full NP ownership
- Build your risk and protection plan: As you choose your entity structure, also make a plan for professional liability insurance that follows you and your practice as you grow. Dedicated NP malpractice coverage can help protect your license, personal finances and business if a claim arises.
As more NPs step into practice ownership, CM&F Group is here to provide professional liability coverage and support informed, strategic decisions that keep your practice strong for the long term. Click here to get a quote.
Frequently Asked Questions
- Does CPOM apply to nurse practitioners? In most states, CPOM applies only to entities regulated by the Board of Medicine. Since NPs are regulated under the Board of Nursing, they can typically fully own their practices—even in CPOM states—unless their services extend into medical procedures outside NP scope.
- Should a nurse practitioner form their practice under the Board of Nursing or the Board of Medicine? Most NPs should form their entity under the Board of Nursing to maintain full ownership and autonomy. A Board of Medicine entity is only necessary when offering services outside NP scope that require physician involvement.
- What happens if a nurse practitioner sets up their entity under the wrong board? If an NP mistakenly forms their practice under the Board of Medicine, correcting it is difficult and often requires creating a new entity. This may involve dissolving the old structure, obtaining physician approval, updating contracts, and working with a healthcare attorney.
