CPOM compliance and bank account ownership explained

Corporate Practice of Medicine (CPOM) is the legal doctrine that determines who can own a medical practice. For the multi-entity healthcare groups covered in how the MSO-PC banking structure works end to end (opens in a new tab), it also determines who can own the bank accounts. Get it wrong and the entire structure unravels at audit.

Here's the short version of what CPOM actually says about banking, where most groups stumble, and what the right setup looks like. This is not legal advice. Confirm specifics with a healthcare attorney for your state.

What CPOM says about account ownership

Most US states have some form of CPOM, which is exactly why the MSO-PC split exists in the first place (opens in a new tab) rather than one shared entity. The doctrine prohibits non-clinicians from owning, controlling, or directly profiting from clinical practice. Strictness varies by state, but the core principle is the same: clinical revenue belongs to the clinician-owned PC, not to the MSO or to a non-clinician administrator.

For banking, that means:

• Each PC's operating account must be in the PC's legal name and EIN, not the MSO's.
• Authorized signers on PC accounts must include at least one clinician owner.
• The MSO can hold its own funds (management fees received, admin expenses paid) in MSO-named accounts, with non-clinician signers.
• Funds flow between PC and MSO via the mechanics of documented intercompany transfers between PC and MSO (opens in a new tab), per the Management Services Agreement (MSA), never via shared accounts.

The legal separation of funds enforces the legal separation of ownership.

Common CPOM banking mistakes

Three patterns repeatedly create CPOM problems:

• Pooled clinical revenue. Multiple PCs depositing reimbursements into one shared account, why pooling clinical revenue across PCs almost always fails compliance review (opens in a new tab). The most common, most expensive mistake.
• MSO as account signer on PC accounts. A non-clinician administrator with signing authority on a PC's clinical revenue account looks like non-clinician control.
• Reverse-direction transfers. The MSO transferring money into a PC account without an MSA-defined reason. This blurs which entity owns which dollar.

Each of these gets flagged in payer audits, state medical board reviews, and IRS examinations. None are difficult to avoid if the structure is set up correctly from the start.

What a compliant setup looks like

For a typical 5-PC group:

1. Each PC has its own bank account in its own name and EIN. Authorized signers include at least one clinician owner of that PC.
2. The MSO has its own bank account with its own signers, separate from any PC.
3. Each PC pays its agreed management fee to the MSO via ACH on the schedule defined in the MSA.
4. The MSO pays admin expenses (rent, equipment leases, billing staff) from its own account.
5. Intercompany transfers are documented (date, amount, purpose, MSA reference) for audit defense.

This setup works in every CPOM state and most non-CPOM states. It also makes the practice easier to value, sell, or restructure later because the entity boundaries are crisp.