The Corporate Practice of Medicine Doctrine: What it Means and How it May Affect Medicine Today

The Corporate Practice of Medicine Doctrine: What it Means and How it May Affect Medicine TodayIn many northeastern states, including New York, as well as many other states across the country, the theory behind the Corporate Practice of Medicine Doctrine is the belief that a medical practice not owned by a physician or medical professional, is not going to function and provide the same quality of care as a physician-owned practice or similar health care provider. This belief is due to the fact that the practice would become beholden to non-doctor shareholders who would dictate treatment based upon economics rather than quality of care.

As a result of the Corporate Practice of Medicine Doctrine, many non-physicians create intricate structures that permit them to become the “de-facto” owners of medical practices which creates further fraud and abuse problems since the doctor in these relationships becomes nothing more than a “dummy doc” as opposed to a “medical director” with clearly defined medical supervision responsibilities. Would following a model from a state that does permit non-physician ownership of professional practices, or a highly scrutinized form of ownership comparable to an Article 28 Diagnostic and Treatment Center, or OASAS clinic resolve the problem in New York? Even if it doesn’t resolve every aspect of the problem, it would certainly highlight the parties responsible as they would be the names on the certificate of incorporation or certificate of need.

New York already has types of health care businesses that are not strictly owned by professionals such as optometrists, pharmacies and durable medical equipment providers, and which are not specifically approved in the same detailed process as Article 28 approved facilities or any other Certificate of Need facility. Is it that much of a stretch to have a clearly defined medical professional responsible for the clinical decisions and an administrative CEO, much the way general hospitals and some states like Florida permit?

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