New York’s Corporate Practice of Medicine (CPOM) doctrine has long been one of the most restrictive in the nation, but 2026 marks a moment of renewed focus. Lawmakers, regulators, and industry observers are once again scrutinizing who truly controls medical practices and how healthcare business structures operate. For providers, this shift is far from academic. It reaches directly into ownership models, MSO relationships, and the overall compliance framework under which practices function.

At its foundation, CPOM in New York rests on a simple but powerful principle: medical decision-making must remain in the hands of licensed professionals, not corporate interests. That core idea is now being reinforced through both legislative activity and regulatory oversight, signaling that the state’s longstanding doctrine is not softening but evolving in response to modern healthcare business models.

A key legislative development this session is Senate Bill S8442/A9012, which reflects a clear policy direction toward strengthening physician governance. The proposal would require licensed physicians to maintain majority ownership and meaningful control of professional medical corporations, including voting shares, board representation, and key leadership roles. It also seeks to limit the ability of non-physician management services organizations and their representatives to exert control over professional entities. Notably, the bill would expand protections for healthcare professionals who report unlawful or unethical conduct, even in the presence of nondisclosure agreements. Together, these provisions underscore the state’s intent to further shield clinical judgment from commercial influence while reinforcing the ethical foundations of patient care.

Even without new legislation, New York’s existing CPOM framework already imposes firm structural boundaries. Medical practices must operate as professional corporations, PLLCs, or comparable professional entities owned and controlled by licensed individuals in the same profession. Traditional corporations, investors, and unlicensed parties generally may not employ physicians to provide clinical services or influence medical decision-making. These rules are designed to preserve the integrity of the physician-patient relationship and to minimize the risk that financial incentives distort medical judgment — the core rationale underlying CPOM doctrine across the country.

At the same time, CPOM compliance now intersects more directly with transaction oversight. New York’s Disclosure of Material Transactions Law, in effect since 2023, has introduced heightened scrutiny of healthcare consolidations and affiliations. Recent Department of Health guidance clarifies when healthcare entities, including physician practices and MSO-supported structures, must submit pre-closing notices for certain transactions. As a result, a practice structure may satisfy CPOM requirements from an ownership and governance perspective yet still fall within the scope of transaction reporting and potential regulatory review. Governance, deal strategy, and regulatory disclosure can no longer be treated as separate considerations.

In this environment, CPOM should be viewed not as a one-time formation issue but as an ongoing compliance priority. Practices should ensure that physician owners maintain genuine control in both form and practice, that MSO roles remain confined to nonclinical functions, and that evolving legislative proposals are closely monitored. Transaction planning must also account for reporting obligations that may attach even to compliant structures. Most importantly, governance documents, operational realities, and regulatory positioning should align consistently.

New York’s direction is clear: the state is not retreating from CPOM principles but reaffirming them in a modern healthcare landscape. Organizations that thoughtfully align structure, governance, and regulatory strategy now will be best positioned as oversight and enforcement continue to develop. Experienced healthcare lawyers at MDRXLaw are available to provide guidance on CPOM and any related matters - please feel free to call us at 212-668-0200 or email us at info@mdrxlaw.com.