By Chase Boss, Senior Editor
Pennsylvania is one of the many states that has adopted the corporate practice of medicine (CPOM) doctrine.[1] The doctrine rests on a simple premise: medical judgment should remain in the hands of licensed physicians, free from lay (and in this case, corporate) control. Today, however, the modern healthcare economy increasingly operates through corporate entities that may influence physician decisions without formal ownership of medical practices.[2]
Over the past two decades, healthcare delivery has shifted toward vertical integration, consolidation, and platform-based care models.[3] Large corporate actors have entered the physician practice space to achieve operational and data-driven goals while streamlining care delivery.[4] While such arrangements are structured to comply with formal requirements under state CPOM laws, the line between permissible administrative support and impermissible control is often blurred.[5]
This feature article examines Pennsylvania’s CPOM doctrine and how its traditional focus on ownership fails to account for modern forms of indirect corporate control. For better or worse, modern trends will increasingly render the doctrine misaligned with its original intent.
CPOM In Pennsylvania
This Commonwealth has long adhered to a traditional version of the CPOM, rooted in common law rather than statute.[6]The Pennsylvania Supreme Court established the foundational principle of the Pennsylvania CPOM doctrine in Neill v. Gimbel Brothers.[7] In holding that corporations cannot exercise control over the professional judgment of licensed practitioners—here, optometrists—the Court reasoned that allowing ownership by non-licensed individuals would undermine professional independence and contravene public policy.[8] Ten years later, the Pennsylvania Supreme Court would extend the doctrine to medical doctors[9] and, later, dentists.[10] Nearly four decades later, Pennsylvania codified the CPOM through the Medical Practice Act of 1985, anchoring its statutory authority.[11]
This principle has been reinforced nationally through related prohibitions, including fee-splitting restrictions and licensing requirements.[12] In Pennsylvania, deployment of the doctrine generally arises through criminal prosecution[13] or the commencement of a civil action by an appropriate board of licensure. That is not to say, however, that licensed practitioners have not successfully pursued equitable relief against unlicensed individuals alleged to be practicing without a license.[14]
The Origin and Underlying Policy
The CPOM doctrine first emerged in the mid-nineteenth century and fully developed in the early twentieth century, in response to broader efforts to professionalize licensed medical providers and to distinguish physicians from commercial actors.[15] At the time, physicians faced competition from unlicensed providers and corporations that threatened patient safety[16] and professional legitimacy; the result was a push for medical education reform and licensing requirements.[17]
Professional organizations, including the American Medical Association (“AMA”), first responded by developing ethical rules designed to preserve medical judgment while serving as a stopgap against profit-driven interference.[18] For-profit medical service companies, also known as corporate practices, ultimately exerted their greatest influence by the early 1900s.[19]
As the push against corporate control over physicians continued, largely due to the AMA’s lobbying efforts, the underlying principles of CPOM nationwide developed under a mix of common law, statutes, and ethical rules.[20]
The MSO Accommodation and the Rise of Corporate Healthcare Platforms
To reconcile CPOM restrictions with the purported need for operational support sought by physicians, the healthcare industry developed the management services organization (“MSO”) model.[21] Under this structure, while a physician (or a physician-owned entity) retains control over clinical services and exercises independent clinical judgment, a separate corporate entity may provide administrative functions such as staffing and billing.[22]
In practice, however, the line between administrative support and operational support can become increasingly blurred, and MSO arrangements should be carefully structured.[23] Indeed, recent developments in healthcare consolidation further complicate the CPOM; private equity firms, hospital systems, and insurers increasingly acquire or affiliate with physician practices, thereby creating vertically integrated healthcare networks.[24] Most notably, some of the world’s largest companies have joined the market.
Take, for example, UnitedHealth Group’s Optum.[25] Optum has affiliated with thousands of primary care physicians nationwide, integrating clinical services into a streamlined insurance-data-technology platform.[26] Such arrangements reflect the financial needs of physicians dating back to the early days of the CPOM doctrine[27] and, in many cases, offer greater financial returns than those of unaffiliated practitioners.[28]
Similarly, Amazon’s acquisition of One Medical reflects the entry of technology companies into the primary care delivery space.[29] There are potential benefits to a large corporation like Amazon entering the healthcare field, given its broad potential to leverage its deep tech expertise (and even deeper pockets) to advance predictive models that identify high-risk health events.[30]
Still, the entry of UnitedHealthcare and Amazon—respectively the world’s seventh- and second-largest companies by revenue[31]—into the primary care delivery space raises significant questions about the traditional CPOM analysis of the gap between formal compliance and functional reality.
The Fall of Traditional CPOM Doctrine
The difficulty of applying CPOM to modern healthcare structures, given the present circumstances, cannot be overstated. As the original doctrine was developed to avoid early contract practices[32] and to preserve independent physician judgment, the looming system is driven by data, technology, scale, efficiency, and centralization.[33] As a result, CPOM’s focus on formal distinctions no longer reflects the underlying realities of corporate influence, which, for better or worse, are poised to redefine healthcare.[34] That change will necessarily impact the efficiency of healthcare facilities and the delivery and management of services.[35]
Here in Pennsylvania, while the CPOM doctrine is still considered by lawyers in structuring MSOs, its practical force is increasingly uncertain. Corporate actors first demonstrated that their influence over clinical decision-making need not arise from corporate decision-making, and that MSOs enable operational integration without formal ownership. That reality will undoubtedly be realized as healthcare approaches consolidation by non-traditional entities such as Amazon and large insurers.
Absent meaningful enforcement of what many have considered an archaic doctrine, CPOM may now be merely symbolic: observed in form but not in practice. Today, it would be more beneficial to address indirect forms of control that directly influence professional judgment amid rising consolidation and a greater focus on technology and scale. If courts or legislators alike wish to preserve the original intent of CPOM, the bright-line formal ownership requirement should be abandoned in favor of a functional control test: does the corporate actor, whether directly or indirectly, influence or dictate clinical decision-making?
Ultimately, the question is no longer whether corporations can participate in healthcare—they already do—but whether the legal framework governing permissible control can keep pace. Truer now more than ever, “[t]he life of the law has not been logic: it has been experience,[36] and CPOM’s continued relevance will depend on its ability to adapt to the realities it purports to regulate.
[1] The Corporate Practice of Medicine 50-State Guide, Permit, https://www.permithealth.com/post/the-corporate-practice-of-medicine-50-state-guide.
[2] Hoag Levins, How Corporatization Continues to Change U.S. Health Care, Penn LDI (Mar. 13, 2025), https://ldi.upenn.edu/our-work/research-updates/how-corporatization-continues-to-change-u-s-health-care/.
[3] Andrew Patzman & Manali Neeck, Health Care Provider Consolidation, Bipartisan Pol’y Ctr. (Jan. 29, 2026), https://bipartisanpolicy.org/issue-brief/health-care-provider-consolidation/.
[4] Id.
[5] Natasha Murphy, How States Can Combat Health Care Consolidation and Corporate Conflicts of Interest, Ctr. Am. Progress (Jan. 22, 2026), https://www.americanprogress.org/article/how-states-can-combat-health-care-consolidation-and-corporate-conflicts-of-interest/.
[6] Thomas C. Fox et al., Health Care Fin. Transactions Manual § 10:13 (Nov. 2025).
[7] 199 A. 178 (Pa. 1938).
[8] Id. at 182.
[9] Palmer v. O’Hara, 58 A.2d 574 (Pa. 1948).
[10] Boggs v. Werner, 94 A.2d 50 (Pa. 1953).
[11] 63 P.S. § 422.10 (1985).
[12] Jerry A. Bell, Jr., Corporate Practice of Medicine and Fee Splitting, Am. Health Law. Ass’n Papers (Apr. 23, 1998).
[13] Commonwealth v. Stemet, No. 306 of 1958, 21 Pa. D. & C.2d 295 (Ct. Q. Sess. Pa. Oct. 2, 1959).
[14] See, e.g., Pennsylvania Optometric Ass’n, Inc. v. DiGiovanni, No. 149 of 1964, 45 Pa. D. &C.2d 245 (C.P. Phila. Mar. 15, 1968).
[15] Jeffrey F. Chase-Lubitz, The Corporate Practice of Medicine Doctrine: An Anachronism in the Modern Health Care Industry, 40 Vand. L. Rev. 445, 449–56 (1987).
[16] Lisa Rediger Hayward, Revising Washington’s Corporate Practice of Medicine Doctrine, 71 Wash. L. Rev. 403, 404 (1996).
[17] Chase-Lubitz, supra note 15, at 451–455.
[18] Id. at 450.
[19] Id. at 456.
[20] Paul Welk, The Corporate Practice of Medicine Doctrine as a Tool for Regulating Physician-Owned Physical Therapy Services, 23 J. L. & Com. 231, 234 (2004); see also George F. Indest, III & Barbara A. Egolf, Is Medicine Headed for an Assembly Line? Exploring the Doctrine of the Unauthorized Corporate Practice of Medicine, 6 Bus. Today 32, 34 (1997).
[21] Hayden Rooke-Ley et al., The Corporate Backdoor to Medicine: How MSOs Are Reshaping Physician Practices, Milbank Mem. Fund, pp. 1–2 (Apr. 2025), https://www.milbank.org/publications/the-corporate-backdoor-to-medicine-how-msos-are-reshaping-physician-practices/.
[22] Id. at 6.
[23] Andrew Weissenberg & Dae Y. Lee, Understanding management services organizations (MSOs): Benefits, compliance risks, and best practices, Med. Grp. Mgmt. Ass’n (Feb. 25, 2025), https://www.mgma.com/articles/understanding-management-services-organizations-msos-benefits-compliance-risks-and-best-practices.
[24] Levins, supra note 2.
[25] https://www.optum.com/en/.
[26] OptumCare Primary Care Physician Practices Deliver More Value to Patients, Outperforming Hospital-Owned Practices on Quality and Cost, Optum (2022), https://www.unitedhealthgroup.com/content/dam/UHG/PDF/2023/2022.01.12%20Optum%20PCP%20Practice%20Ownership%20-%20WEB.pdf.
[27] James G. Burrow, Organized Medicine in the Progressive Era, pp. 124–25 (1977).
[28] Juan Siliezar, UnitedHealthcare pays more to its own physician practices than others, study finds, Brown U. Sch. of Pub. Health (Nov. 10, 2025), https://sph.brown.edu/news/2025-11-10/unitedhealthcare-optum-payments.
[29] 5 Things to Know about Amazon’s Recent One Medical Acquisition, Am. Hosp. Ass’n, https://www.aha.org/aha-center-health-innovation-market-scan/2023-03-07-5-things-know-about-amazons-recent-one-medical-acquisition.
[30] Heather Landi, Why One Medical’s CMO believes Amazon Health can make a big impact tackling chronic diseases, Fierce Healthcare (Oct. 13, 2023), https://www.fiercehealthcare.com/health-tech/why-one-medicals-cmo-believes-amazon-health-can-make-big-impact-tackling-chronic.
[31] Fortune Global 500, Fortune, https://fortune.com/ranking/global500/.
[32] Nicole Huberfeld, Be Not Afraid of Change: Time to Eliminate the Corporate Practice of Medicine Doctrine, 14 Health Matrix 243, 247 (2004).
[33] Levins, supra note 2; Evolving Physician-Practice Ownership Models, Am. Health Ass’n Ctr. for Health Innovation, https://www.aha.org/system/files/media/file/2020/02/Market_Insights_MD_Ownership_Models.pdf.
[34] Katherine Marous, The Corporate Practice of Medicine Doctrine: An Anchor Holding America Back in the Modern and Evolving Healthcare Marketplace, 70 DePaul L. Rev. 157, 186 (2022).
[35] Id.
[36] Oliver Wendell Holmes, The Common Law, Lecture I (1881).