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As CPOM Restrictions Tighten Nationwide, Florida Remains Open for Business, For Now

By: Carlos Arce

As corporate practice of medicine (“CPOM”) restrictions continue to tighten across multiple states, stakeholders in the healthcare industry particularly those involved in multi-state operations must navigate a shifting legal landscape. These evolving regulatory frameworks increasingly limit the degree of control non-physicians may exert over medical practices. Yet, amid this national trend, Florida stands out as a jurisdiction that remains relatively business-friendly at least for the time being.

In Florida, medical practices that do not submit claims to insurance payors may be wholly owned by non-physicians. This unique flexibility removes the necessity for a Management Services Organization (“MSO”) as a structuring vehicle when payor reimbursement is not part of the revenue model. In such cases, a direct ownership approach can be used, sidestepping the typical Professional Corporation (“PC”) and MSO arrangement commonly seen in CPOM-restricted states.

However, when insurance reimbursement is part of the equation, the calculus changes. In these instances, non-physician ownership of a Florida practice must occur through a licensed Health Care Clinic (“HCC”), pursuant to Florida’s Health Care Clinic Act. This route provides a compliant pathway to receive third-party reimbursements while maintaining non-clinical ownership. Attempting to bypass the HCC model while collecting insurance payments can trigger regulatory scrutiny and jeopardize the practice’s legal standing.

For organizations with ambitions beyond Florida, a hybrid structure becomes a strategic necessity. One model I often recommend involves using the MSO as the licensee of the Health Care Clinic in Florida. This MSO entity can then serve as the foundational platform for expansion into CPOM-restricted states. In those jurisdictions, the MSO functions as a true administrative services provider offering back-office support, marketing, staffing, billing, and IT while clinical control is reserved to the PC and licensed physicians.

This structure offers several advantages:

               • Revenue Control in Florida: Through the HCC license, the MSO retains economic rights within the state.

               • Administrative Uniformity Across States: The MSO can standardize processes and compliance across multiple jurisdictions.

               • Scalability: The model allows for streamlined growth into states with CPOM restrictions without running afoul of local corporate practice laws.

Nevertheless, this structure is not without its complications. One of the key legal and operational challenges lies in aligning payor contracts across jurisdictions. Payor agreements entered into by a licensed Florida Health Care Clinic cannot simply be extended into CPOM states without careful legal structuring. Each state’s regulatory regime may require separate contracting entities, compliance protocols, and possibly, payor credentialing under distinct PCs.

Furthermore, the MSO model itself is under increased scrutiny. Several states have adopted or proposed “transaction review” statutes, requiring regulatory approval for certain management services agreements, equity transactions, or changes of control. Additionally, some jurisdictions are introducing or enforcing “entirety” rules that limit the scope of services an MSO can provide to a PC. These developments could curtail the flexibility of MSOs and demand more sophisticated structuring and documentation to withstand regulatory challenges.

As a result, MSO models are no longer plug-and-play. They must evolve to accommodate an increasingly fragmented legal environment, particularly for wellness enterprises, concierge medicine platforms, and retail health brands with national or multinational footprints.

Conclusion

While Florida remains a relatively permissive state for non-physician ownership of medical practices, particularly those not reliant on insurance reimbursements, that window may not remain open indefinitely. For ventures with multi-state aspirations, a forward-thinking, hybrid MSO structure offers the most strategic and compliant pathway balancing operational control in Florida with legally sound expansion into CPOM-restricted jurisdictions. Legal and compliance teams must stay vigilant, as the rules governing MSOs, clinic licensing, and payor relationships are in flux and under increasing state-level scrutiny.