Michigan Updates Corporate Practice of Medicine Laws

Michigan’s reworked Corporate Practice of Medicine laws now allow for multidisciplinary practices amongst physicians (licensed MDs and DOs), podiatrists, and chiropractors. Prior to 2022, Michigan’s Corporate Practice of Medicine laws prohibited chiropractors from forming professional corporations with physicians and podiatrists. Now, chiropractors are generally permitted to form professional corporations with physicians and podiatrists without violating Michigan’s Corporate Practice of Medicine laws.

Corporate Practice of Medicine occurs when a corporate entity practices medicine, as opposed to an individual practitioner. In this arrangement, the corporate entity employs physicians, and the physician provides the medical services. Since corporate entities generally exercise some level of control over how their employees perform their roles and many states believe that medical decision making should solely be done by physicians and not be influenced by non-physician employers, many states prohibit or regulate the corporate practice of medicine. These prohibitions and regulations are one of the reasons that physicians form physician groups or professional corporations.

While each state has its own approach to regulating the corporate practice of medicine, there are three general approaches. First, some states do not regulate the corporate practice of medicine or otherwise restrict physicians’ ability to be employed by entities controlled by non-physicians. Second, some states fully prohibit the corporate practice of medicine. These states allow only physicians to form and be shareholders in professional corporations, associations, or professional limited liability companies (PLLCs), and do not permit non-physicians to employ physicians. Finally, other states fall somewhere in the middle. Several states allow non-physicians to own a portion of a professional corporation that practice medicine, but limit this to a minority (49%) interest or other non-controlling interest. Other exceptions exist as well. Some states impose less strict or even no restrictions on non-profit corporations’ practice of medicine. For example, Texas has a general prohibition on the corporate practice of medicine but has a specific exception for Non-profit corporations.

Until the change, Michigan generally required that only physicians and podiatrists could be owners or shareholders in such a professional corporation. Now, Michigan has expanded its ownership restrictions by allowing chiropractors to form professional corporations with physicians and podiatrists. This change was made to address the changing nature of primary care and to help better serve Michigan residents. While this change now allows chiropractors to have ownership interest in professional corporations that practice medicine, it does not change the scope of care chiropractors are able to provide.

Corporate practice of medicine laws are often nuanced and can have significant impacts on business models and corporate structures, especially for multi-state healthcare providers doing business in multiple states. An experienced healthcare attorney can help a provider comply with corporate practice of medicine rules.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in navigating regulation of the corporate practice of medicine. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or wapc@wachler.com