The Telehealth Loophole: How Corporations Sidestep Patient Protection

Introduction

Telehealth and digital medicine have opened exciting new doors for accessing care. From virtual urgent care visits to online prescription services, these platforms promise convenience and innovation. Yet behind the friendly apps and websites, many telehealth brands are backed by large corporations or private equity investors. This raises a troubling question: Are the doctors you encounter online truly free to put patients first, or are they subtly steered by corporate interests? In the United States, Corporate Practice of Medicine (CPOM) laws were supposed to prevent this very problem by keeping business corporations out of direct medical care. These laws aim to ensure your doctor’s decisions are guided by your health needs – not a company’s profit motive. Unfortunately, as we will explore, corporate-backed telehealth companies have found clever legal loopholes to routinely bypass CPOM restrictions. The result is a system that on paper complies with the law (a doctor is technically in charge) but in practice often lets business executives pull the strings.

In this article, we will explain what CPOM laws are meant to do and how they protect the patient-physician relationship. We’ll then expose how telehealth corporations exploit loopholes – through arrangements like Management Services Organizations (MSOs), “friendly” paper (or PC) physician owners, and complex webs of entities – to dodge those rules. Finally, we’ll highlight why this matters for patients: from conflicts of interest and higher costs to erosion of trust and reduced choice. Throughout, the tone will remain professional and factual – disappointed, perhaps, that such workarounds are needed at all – but focused on clarity. By the end, you’ll be empowered to peek behind the marketing of telehealth services and see who really holds the reins. We’ll also call on patients to support physician-owned clinics and note that some states are starting to crack down on these loopholes. Let’s dive in and shine a light on how the corporate practice of medicine is being quietly undermined in the telehealth era.

What Are CPOM Laws and Why Do They Exist?

“Corporate Practice of Medicine” (CPOM) laws are state regulations that prohibit standard corporations or other non-physician entities from practicing medicine or employing physicians. In simple terms, only licensed medical professionals (like physicians) are allowed to own a medical practice or directly hire physicians to provide care. The primary goal of CPOM laws is to protect the integrity of the patient–physician relationship. By keeping business corporations out of medical ownership, these laws seek to ensure that medical decisions are made solely based on patient welfare and sound clinical judgment, not commercial or shareholder interests.

Think of CPOM as a firewall between the exam room and the boardroom. It originated from the belief that if a lay corporation (for example, a chain pharmacy or a private equity firm) could employ doctors or own clinics outright, there’s a risk that business priorities (profits, sales targets, cost-cutting) might influence how doctors diagnose and treat patients. Doctors might be pressured to see more patients than is safe, favor a drug or test from a company partner, or cut corners on care – all due to non-medical higher-ups pushing financial goals. CPOM laws, which date back in some states nearly a century, were intended to prevent such scenarios by keeping clinical control in the hands of medical professionals. In essence, they say: the practice of medicine is a special trust, and the only people who should own a medical practice are those sworn to uphold patient care (licensed physicians).

While CPOM laws vary by state (some states have strict bans on any corporate ownership of medical practices; others are more permissive or have exceptions), the spirit is consistent. For example, Texas’s CPOM doctrine explicitly “prohibits corporations and non-physicians from practicing medicine or employing physicians to provide medical services,” specifically to prevent outside entities from influencing a physician’s medical judgment with economic factors instead of patient welfare. California, New York, Illinois, and many other states have similar statutes or regulations. These laws typically also extend to other licensed health professionals – meaning they also bar non-dentists from owning dental practices, non-optometrists from owning vision clinics, and so on. The shared principle is that medical professionals must be in charge of medical decisions and that the clinical judgment must remain independent.

In summary, CPOM laws are designed as patient protection laws. They aim to ensure that when you see a doctor, the only considerations in play are medical considerations – not the revenue targets of a parent company or the return-on-investment expectations of distant investors. In the ideal envisioned by CPOM, your doctor’s primary obligation is to you and not to any corporate boss. This legal doctrine is a cornerstone intended to uphold trust in healthcare. But as we’ll see next, the rapid rise of corporate-funded telehealth ventures has tested these protections in new ways.

The Rise of Corporate Telehealth (and Its Workarounds)

Over the past decade – especially accelerated by the COVID-19 pandemic – we have witnessed a boom in telehealth and virtual medicine. New startups and platforms have emerged to offer everything from online primary care and mental health counseling to subscription-based prescription refills. Many of these companies were founded by people outside traditional medicine: tech entrepreneurs, engineers, businesspeople, even venture capital firms. Their innovations have indeed expanded access and convenience. However, one complication they all face is this: if only doctors can own medical practices (because of CPOM laws), how can a venture-backed startup or a big corporation run a nationwide telehealth service?

The answer: by finding legal workarounds. Corporate telehealth providers and private equity investors didn’t waste time hiring lawyers to navigate CPOM restrictions. They discovered (and in some cases, practically invented) methods to structure their businesses such that they appear compliant with the letter of CPOM laws while effectively bypassing their spirit. The most common structure that has emerged is often called the “MSO model” or “friendly PC” model. MSO stands for Management Services Organization, and PC stands for Professional Corporation (a company owned by a licensed professional, in this case a physician). In this model, instead of a corporation outright owning a clinic or employing doctors, the arrangement is split into two pieces:

The Professional Corporation (PC): This is a company that is legally owned by one or more licensed physicians. In states with CPOM laws, all clinical services (the practice of medicine) must be delivered through this physician-owned entity. On paper, the PC is the medical practice. For instance, if a telehealth brand “AcmeHealth” wants to operate in State X (which has a CPOM law), it might set up “AcmeHealth Medical Group of X, P.C.” and have a local licensed physician be the owner (or use one physician owner for multiple states, as discussed later). This PC hires the doctors or nurses who treat patients (or contracts with them) and is the entity that technically provides the care to patients.

The Management Services Organization (MSO): This is the corporation (often backed by investors or a parent company) that actually runs the business side of things. The MSO is a separate entity that does not practice medicine directly. Instead, it enters into a contract with the PC – usually a Management Services Agreement (MSA) – to provide all the non-clinical services the practice needs. The MSO handles administration: scheduling software, billing and coding, marketing, tech platform, hiring support staff, negotiating contracts with insurers, and so on.

MSA spells out what the MSO will do and how the PC will pay for those services. Ideally, this fee is set at “fair market value” for the services provided to remain legal (so it doesn’t look like the MSO is just taking all the practice’s profits). But really--it's taking all the profits and paying the 'friendly' doctors a fixed fee (usually based on the number of telehealth visits completed).

In theory, this model can comply with CPOM laws, because the PC (owned by a physician) is the entity practicing medicine, and the MSO is just a contractor providing services (but really the PC is providing services to the MSO--which is not legal). In practice, however, these arrangements often push right up to the line – and sometimes over it – effectively giving the MSO (the corporate side) control over the medical practice’s finances and operations. As one healthcare attorney noted, private equity firms adopted the MSO model as a way to invest in healthcare while “technically complying” with CPOM, but “the devil is in the details”. Many management agreements cross into illegitimate territory by transferring too much control or revenue to the corporate entity, turning the physician owners into figureheads.

How do telehealth companies use this model? Imagine a telehealth startup that has a slick app and millions in venture funding. It wants to operate in all 50 states. To obey state laws, it might establish a patchwork of physician-owned PCs – e.g., “XYZ Medical Group, P.C.” in each state (or regional group). Those PCs might all be owned (on paper) by one or a handful of doctors who have multi-state licenses. Meanwhile, the main company “XYZ Telehealth Inc.” acts as an MSO – providing the brand name, technology platform, marketing, and administrative muscle – and it signs contracts with each of those state PCs. Through those contracts, the telehealth company can extract the vast majority of the revenue (by charging the PCs hefty “management fees”) and dictate many aspects of day-to-day operation. As long as the paperwork is in order and a physician nominally sits atop each PC, the letter of CPOM law is satisfied.

This MSO loophole has effectively become the backdoor by which corporations enter the exam room. It is no longer just hypothetical – it’s the norm in many sectors. “Large publicly traded and private equity–backed providers use this model to functionally acquire and run medical practices,” a recent policy report observed. In other words, the MSO structure lets corporations functionally own clinics without legally owning them. For telehealth and digital health companies, which often operate across multiple states and need significant capital, this model is especially prevalent. It allows a well-funded company to rapidly roll out services nationwide by partnering with (or creating) physician PCs in each locale, all coordinated by a centralized MSO.

To be clear, not all MSO arrangements are nefarious or illegal – some genuinely leave medical judgment alone and just provide valuable administrative support. But many go further, blurring the line between “support” and “control.”One health policy brief noted that MSOs have evolved from simple back-office service providers into vehicles that “aggregate medical groups, negotiate payer contracts, and facilitate corporate investment — often blurring the line between support and control.” These MSOs are now used by private equity and others specifically “to bypass state prohibitions on the corporate practice of medicine,” allowing corporations to influence clinical care and assume de facto ownership of practices.

In summary, corporate telehealth companies have risen to prominence by cleverly restructuring the delivery of care into two parts. The care is delivered by doctor-owned PCs (to satisfy laws), but everything else is run by an MSO controlled by the corporation (to satisfy investors). This arrangement can be legally complex – involving layers of contracts and entities – but the key point for patients is: the presence of a physician as the technical owner doesn’t necessarily mean the practice is truly independent or physician-run. In the next section, we’ll pull back the curtain further on one particular aspect of this scheme – the so-called “friendly physician” arrangement – which is central to making these setups work.

“Friendly” Physician Owners: Doctors on Paper, Corporations in Practice

One of the most important cogs in the CPOM workaround machine is the “Friendly PC” model, sometimes bluntly called using a “paper” physician owner. In plain terms, a **friendly physician owner is a licensed doctor who agrees to legally own a medical practice (the PC) on behalf of a corporation, often in exchange for payment or a job title. This doctor is “friendly” in the sense that they are cooperative with the corporation’s wishes. They hold the ownership title, but they do not truly operate autonomously – they often answer to the corporate management service organization (MSO) that installed them. In many cases, the physician owner is actually an employee or executive of the company. For example, a telehealth company might designate its Chief Medical Officer (who is a licensed MD) as the owner of all its affiliated PCs. That doctor might be licensed in dozens of states, allowing them to nominally own each state’s professional corporation.

"A friend of mine was offered $50k a year to be the friendly physician partner of a national multi-million dollar VC backed Telehealth company. The understanding is that you take the money and then stay out of the way while your name is on all the consent forms because technically the Telehealth company is not the one giving you care, it's this one friendly physician's name on all the legal paperwork". -Anonymous physician

How is this legal? Remember, CPOM laws say who can own a practice (a doctor), but they don’t always dictate the details of how that ownership works internally. Corporate lawyers exploit this by creating contracts that bind or incentivize the physician owner to do the company’s bidding. For instance, the MSO (corporation) might have a contract with the physician-owner that gives the MSO the right to appoint a new owner if the current doctor doesn’t follow certain directives or tries to leave. In fact, in a *“friendly PC” model, business leadership is often given the contractual right to choose the physician owner and replace them as needed. As one guide for healthcare startups notes, because the company can influence who the physician owner is, they simply find a doctor who is “motivated to enable the business” – and if that doctor becomes “uncooperative,” they can be removed and their employment effectively terminated.

In practice, this means the physician’s independence is largely a fiction. The MSO holds the real power, because the physician owner knows that if they go against the corporate objectives, they could lose their position (and perhaps their equity or job). Thus, the physician is essentially a figurehead – a necessary fixture to satisfy the law, much like a registered agent. Industry insiders sometimes even refer to these roles as “captive” physicians since the doctor is captive to the business. The corporation becomes the shadow owner of the practice, pulling the strings from behind the scenes while the doctor’s name is on the letterhead.

Telehealth companies have leaned heavily on this friendly physician model. Given the multi-state nature of telemedicine, it’s not uncommon for a single physician (or a small group of physicians) to be listed as the owner of dozens of state-level professional corporations affiliated with one telehealth brand. For example, a national online dermatology service might have one dermatologist nominally owning subsidiaries in 20 different states, even if that doctor only physically practices in one state. They can do this by obtaining licenses in multiple states – a process that has become easier with interstate licensing compacts and demand for telehealth. Once licensed, that physician can formally “own” the practice entity in those states. The day-to-day medical work, of course, is done by many other doctors (contractors of the PC), but on the books, it’s the friendly physician who owns the practice and hires those doctors.

From a patient’s perspective, all of this is invisible. When you use a telehealth app, you might see branding implying that it’s physician-led – perhaps a photo of a white-coated Chief Medical Officer on the “About Us” page, or a statement like “Our network of doctors is led by Dr. So-and-so.” What you typically won’t see is an explanation that Dr. So-and-so actually owns the professional corporation that employs or contracts your doctor, under an arrangement with the venture capital firm that paid for the app. The companies don’t advertise the legal gymnastics; they present the service as seamless and patient-centric. The friendly physician model works because it stays behind the curtain.

It’s worth noting that regulators and courts are becoming wise to this scheme. In some cases, these arrangements have been challenged as sham ownership. For instance, a few years ago in California, a physician group sued a large corporate medical staffing firm, alleging that the firm was using a nominal “friendly” medical director to hide what was essentially corporate control of an emergency department practice. The lawsuit claimed the company was making all the staffing and budgeting decisions – things a true owner would do – thus violating California’s CPOM law. The case got far enough that a court signaled the allegations, if true, would indeed represent an illegal setup, and the company ended up pulling out of the state rather than risk a judgment against its model. This kind of litigation is still rare (because detecting and proving these arrangements is difficult), but it underscores that the friendly PC model is legally fragile when scrutinized. It exists in a gray zone, tolerated in many places but potentially punishable if a regulator or court decides to enforce the CPOM doctrine strictly.

In summary, “paper” physician ownership is the linchpin of how corporate telehealth outfits get around CPOM laws. By plugging in a cooperative doctor to act as the owner of the practice – often across many states – they satisfy the letter of the law. Yet in substance, the true control lies with the corporation that installed that physician. It’s a bit like putting a captain’s hat on a crew member while the real captain gives orders from the shadows. This setup enables rapid expansion and control for the company, but as we discuss next, it can carry significant downsides for patients.

Risks and Consequences for Patients

Why should patients care about these convoluted ownership structures? If the visit with your telehealth doctor seems fine, does it matter who employs the doctor or who owns the practice? Yes – it absolutely can matter. When corporate interests intermix with medical practice through these loopholes, there are several important risks and consequences that can directly or indirectly affect patient care. Below, we outline the key concerns:

Conflicts of Interest and Biased Care: The most immediate risk is that a corporate-controlled practice may put profits above patients, even in subtle ways. CPOM laws existed to prevent exactly this scenario, and when they are bypassed, the motives of non-physician owners can seep into clinical decisions. For instance, if a management company effectively controls scheduling and workload, doctors might be pushed to see more patients per hour or spend less time on each consultation to increase volume. A powerful MSO could impose productivity quotas or standardized protocols that prioritize revenue – for example, encouraging clinicians to order more billable tests or to prefer certain medications or brands due to business deals. As the Milbank Memorial Fund warns, a strong MSO can invert the relationship and make physician-owners “functional employees of a corporate entity.” When that happens, “if the MSO is singularly interested in pursuing profits, its motives may conflict with physicians’ commitment to patient care”. In other words, the doctor’s primary obligation to the patient can be compromised by the company’s obligation to its investors. This conflict of interest might not be obvious to the patient, but it can manifest in ways like over-prescribing expensive drugs (some studies have found that corporate-owned practices tend to favor higher-cost meds), or simply a less personalized approach to care. Over time, this corrodes the quality of care. Doctors themselves often feel moral distress in such environments – they know when they are being pressured to cut corners or push services, and it can cause “moral injury” when they can’t practice as they believe they should. The bottom line: when your doctor is employed by a corporation that sidestepped CPOM, you may have to wonder, “Is this advice truly in my best interest, or is there a hidden business agenda?”
Higher Costs for Patients and the Healthcare System: Another major consequence of corporate consolidation via MSO structures is increased healthcare costs. When independent practices are taken over by private equity firms or large companies, the new owners often seek a return on their hefty investment – which frequently leads to higher prices for services. Research is now confirming what many suspected: corporate acquisition of physician practices drives up prices without clear improvements in quality. For example, one analysis found that after private equity firms acquired groups in dermatology, gastroenterology, and ophthalmology, prices for patient visits rose by about 11% on average. In another case, charges for neonatal (newborn) care surged by 70% post-acquisition. In gastroenterology, private equity ownership led to a 28% increase in certain procedure claim costs. These are staggering jumps. The higher costs eventually trickle down to patients – you might see it as a bigger bill if you’re paying out-of-pocket, or indirectly through rising insurance premiums and co-pays. Telehealth services are not immune to this; a corporate telehealth provider might start with low promotional prices to gain market share, only to ratchet them up once they dominate a niche. Or they may add on ancillary fees (for example, charging for membership or extra services) that a small physician practice wouldn’t. Additionally, if a company owns a chain of practices, it can use its bargaining power to negotiate higher reimbursement rates from insurance which again can lead to higher overall healthcare spending and premiums. In short, the erosion of CPOM opens the door to “stealth consolidation” in healthcare that has a direct wallet impact on patients – you end up paying more for the same service.
Erosion of Trust and Transparency: Trust is the bedrock of the patient-physician relationship. When you see a doctor, especially for something sensitive via telehealth, you want to trust that their only concern is your well-being. If patients discover that their supposedly physician-led care is actually orchestrated by a corporation, it can seriously erode that trust. The lack of transparency itself is a red flag. Currently, information about who actually owns or controls many health care practices is limited or opaque. A telehealth website might not clearly tell you, “Our service is managed by XYZ Corp and financed by a private equity firm,” but that’s often the reality. This opacity “obscures the financial backers…and associated potential conflicts of interest in an organization’s leadership,” as one report notes. Patients might not realize, for example, that the kindly doctor on screen has quotas to meet or that the choice of a specialist referral is influenced by an affiliate business. Over time, these hidden influences, if they come to light, can make patients cynical. For skeptical patients who already mistrust “Big Pharma” or hospital systems, finding out that their telehealth provider is essentially a venture capital investment could confirm their worst fears. Moreover, trust suffers on a broader societal level when medicine appears to be “just another business.” That’s why maintaining independent physician judgment is so critical. When CPOM is circumvented, the line between medical advice and sales pitch can blur, even if well-meaning doctors try to shield patients from any corporate considerations. For patients, just the knowledge that your healthcare provider is part of a profit-driven chain can plant doubt: “Is this test truly necessary, or is it a money-maker for the company?” That doubt undermines the open, honest dialogue that effective healthcare relies on.
Unfair Competition and Reduced Patient Choice: Lastly, the corporate circumvention of CPOM has market-level consequences that can ultimately limit patients’ options. Physician-owned independent practices — which often provide more personalized care and have longstanding community relationships — find it hard to compete with corporate-backed entities that have huge marketing budgets and economies of scale. When a big telehealth company enters a space using MSO-friendly PC structures, it can rapidly grow and squeeze out smaller players. Over time, this can lead to local monopolies or oligopolies in certain specialties. Indeed, private equity-backed firms have been aggressively consolidating fragmented physician practices to increase their market power. In many areas of care, corporate entities (including insurers and retail chains) now own more practices than even hospitals do. This stealth consolidation means patients might have fewer truly independent choices than it appears. The competition, which normally keeps quality up and prices down, is eroded. Additionally, corporate entities often use legal tactics to lock in their advantage – for example, restrictive covenants (non-compete clauses) that prevent doctors who work for them from leaving to start their own practice nearby. Some MSO arrangements have required physician owners to sign non-compete agreements that effectively tie them to the corporate network. If those doctors leave, they can’t serve patients in the same region for a period of time, which means patients lose access to a trusted doctor unless they stay within the corporate group. This is why state lawmakers are scrutinizing such practices; a bill in Oregon, for instance, aims to outlaw non-competes for physician owners who have only a small stake or are under MSO contracts. Less competition and choice can lead to higher costs and less incentive to prioritize patient satisfaction. It can also concentrate power in entities that may put profit first. All of this runs counter to the intention of CPOM laws, which were to keep care patient-focused and locally controlled by professionals rather than corporations. As one analysis put it, unchecked corporate MSO influence can “weaken competition, and erode physician independence” in healthcare– outcomes that ultimately hurt patients through higher prices and less personalized care.

In sum, when corporations routinely bypass CPOM through shell arrangements, patients face very real risks. Your care might become a little more cookie-cutter and profit-driven (conflict of interest); you might pay more for it (cost impact); you might trust the system even less (transparency and trust issues); and you might have fewer alternatives if you’re unhappy (reduced competition). These are not just abstract concerns – they affect the everyday experience of healthcare. The next time you use a telehealth service, it’s worth considering these factors. However, patients are not powerless. In the following sections, we’ll discuss how you can be more aware of who is behind your care, and what can be done to restore the balance toward physician-led, patient-first medicine.

Who Really Owns Your Telehealth Provider? (Encouraging Patient Awareness)

Given the intricate ways that corporate entities hide behind CPOM-compliant facades, patients are wise to start asking questions and doing a bit of homework. If you’re using a telehealth platform or any medical service, it’s fair to wonder: Who is actually in charge here? Is it a physician or a corporation? Being an informed patient today includes understanding the business of medicine, because it can impact your care.

Here are a few tips to research who really owns or controls a telehealth brand:

Read the Fine Print: Many telehealth companies will include on their website (often in the footer or the terms of service) a notice about who provides the medical services. It might say something like, “Medical services provided by XYZ Medical Group, P.C.” or “XYZ Telehealth is a management service provider for independent medical practices.” This kind of language is a tip-off that the company is using the MSO model. The named “Medical Group, P.C.” is likely the physician-owned entity (possibly a friendly PC), whereas the branded company is the MSO. If you see that, you know there’s a split structure. You can often copy that PC name and search your state’s corporation registry or medical board website to find out who the owners or directors are (many states make business filings public). You might discover that the director is a physician from out-of-state, or one physician is the officer for many such entities, indicating a friendly owner arrangement.
Check Leadership and Board Listings: Look at the “About Us” or “Our Team” page. Do you see mostly business executives and maybe one token Chief Medical Officer (CMO)? If so, that suggests the company is business-driven at its core. A truly physician-owned and operated practice would list physicians in the top leadership positions across the board. If the CEO, COO, etc., are not clinicians, then clinicians likely do not have ultimate control. Also, if the site lists a “Medical Advisory Board” or a panel of doctors but they appear more like advisors than operators, that’s usually more of a marketing feature than governance. Don’t be fooled by a few MDs on the website; investigate their roles. Are they the actual owners, or just employed professionals?
Follow the Money: News articles, press releases, or health industry reports can be illuminating. Many telehealth companies have press releases about venture capital funding rounds or acquisitions. If you read that a telehealth startup received $50 million from a certain private equity fund, or was acquired by a larger corporation, it’s a strong indicator that the control and direction of that service will answer to those financiers. You may not find a document that outright says “We bypass CPOM using an MSO,” but if you know Company X is a subsidiary of a big retail pharmacy chain, you can intuit the incentives that might be at play. Likewise, if a private equity firm is behind a telehealth brand, you can bet they intend to grow it fast and increase profitability (which can translate into the pressures we discussed in the risk section).
Ask Your Provider (if appropriate): It might feel awkward, but you can ask a doctor or support staff in a telehealth visit, “Is this service run by the doctors or is there another company managing things?” A frontline worker might not fully know the corporate structure, but sometimes you’ll get candid information (unless the calls are being recorded or transcribed). Some doctors might acknowledge that they are contractors for an entity, or that they work for a physician-led group that partners with a company. If you get the name of that physician group, you can research it further. There’s no need to turn a medical visit into an interrogation, but outside of urgent situations, clinicians often appreciate patients taking interest in how the practice works. A physician who actually owns their practice will probably be proud to tell you that. By contrast, one who is essentially an employee of a telehealth corporation might say something like “I work with [Telehealth Brand].” The phrasing can be telling.
Transparency Resources: A few states are moving towards requiring more public disclosure of ownership (for example, Massachusetts recently passed a law to increase transparency in health care entities’ ownership and financial backers. You can watch for any databases or reports that come from such efforts. Additionally, advocacy groups and medical associations (like state medical societies) sometimes publish reports or testimony on the trend of corporate ownership. These can provide clues to which brands are physician-owned vs. investor-owned. For instance, the American Medical Association and others track the percentage of practices owned by hospitals or corporations. In 2022, a report noted that corporate entities (including private equity) had surpassed hospitals in owning physician practices for the first time. They might not list names in those reports, but the trend data underscores why patients should be attentive.

Ultimately, the goal is not to make every patient a private investigator, but rather to encourage a habit of looking “under the hood” of healthcare services. We are used to checking reviews or credentials for our doctors; checking ownership is just another layer of diligence. If you find that a telehealth service is essentially a front for a large corporation and that concerns you, you have the option to seek out providers that are physician-run or at least to ask the provider how they maintain clinical independence. At the very least, by being aware, you send a message to the industry that patients value transparency and physician-led care. Companies are starting to realize that savvy patients are asking these questions, and it pressures them (or regulators) to be more forthcoming about who’s in charge.

Stay curious: next time you try a new digital health service, take a moment to scroll to the fine print or do a quick web search on the company. You might be surprised by what you learn, and that knowledge can inform your healthcare choices. After all, as a patient, you have the right to know who is profiting from and directing your care – it’s part of making an informed decision about where to get treatment.

Supporting Physician-Owned Clinics: Putting Patients First

The discussion above might leave you feeling a bit disillusioned about the state of telehealth and corporate influence. It’s important to highlight that not all medical practices have capitulated to this trend. There are many clinics, including some telehealth providers, that are genuinely owned and operated by physicians or allied health professionals who put patient care above all else. These independent practices often struggle to compete with corporate-backed ones, but they represent a model of care that many patients and doctors still greatly prefer – one where the patient’s interest is the only interest.

As patients, one powerful thing we can do is to support physician-owned and physician-led practices. This can mean choosing a local doctor’s office that isn’t part of a big hospital system or corporate chain, or opting for telehealth services that are transparent about being doctor-owned (they do exist – for example, some specialty telehealth services are run as cooperatives or small partnerships of doctors). By giving our business and trust to these independent practitioners, we help them survive and thrive. In fact if you see a physician owned clinic, that likely means they experienced moral hazard with large corporations and they're the rebels who left corporate agendas to support patient advocacy and safer patient care.

Why support physician-owned clinics? Here are a few reasons:

Alignment of Values: When the people who own the practice are the ones delivering the care, their incentives align with patient welfare. They succeed by doing a good job for you, not by meeting a quota handed down from a finance department. Independent doctors often say their joy in medicine comes from focusing on patients without interference. Supporting them helps preserve that paradigm.
Community Benefits: Physician-owned practices are often deeply rooted in communities. They are more likely to stay in underserved areas when big players might not find it profitable. They also often participate in local events and public health initiatives. When corporate chains take over, there’s a risk that less profitable services (like free health education or sliding-scale fees for the needy) might disappear. Keeping medicine locally owned maintains those community-oriented aspects of care.
Innovation in Care (not just in tech): Corporations innovate to increase efficiency or profit, but independent clinicians innovate to improve patient care and experience. Many new care models – like integrative primary care, holistic wellness approaches, or direct primary care subscriptions – have come from physicians, not MBAs. By supporting physician-led ventures, you encourage the kind of innovation that is centered on patient outcomes, not just monetization.

Of course, choosing a provider isn’t always straightforward. Insurance networks, location, and other factors limit our choices. And some corporate-owned practices may have excellent clinicians and provide satisfactory care. The point isn’t to boycott all health corporations but to be mindful of who ultimately answers to whom. If you have the privilege of choice, consider giving your patronage to a practice where doctors hold the decision-making power.

Furthermore, patients can lend their voice to advocacy. Regulators and lawmakers pay attention to patient complaints and stories. If you feel you received subpar care or faced outrageous charges due to corporate policies, speaking up can make a difference. This could be through giving feedback to state medical boards, writing to legislators, or even sharing your concerns in community forums. For example, if a telehealth company wouldn’t let your doctor continue a certain treatment because of a “company policy,” that’s something worth flagging to authorities – it strikes at the heart of CPOM principles.

Another avenue to support physician-led care is through legislation and policy change, which we’ll discuss in the next section. Patients can support efforts (and the politicians who back them) that aim to reinforce the original intent of CPOM laws. After all, these laws are meant to protect you, the patient. In recent times they haven’t been doing that job well, because they’ve been circumvented. But that might be about to change, with enough public support.

Before concluding, it’s worth addressing an ironic contrast that highlights why this issue is so critical…

A Revealing Double Standard: Physicians Barred from Owning Hospitals

To fully appreciate the imbalance in how rules are applied in healthcare business, consider this fact: Physicians in the U.S. are largely forbidden from owning hospitals, yet corporations are freely owning (through proxies) physician practices. This situation didn’t happen by accident – it’s the result of powerful lobbying by the hospital industry. In 2010, the Affordable Care Act placed strict limits on physician-owned hospitals (basically preventing new physician-owned hospitals from participating in Medicare, which is a de facto ban on opening new ones). The reason? Large hospital associations lobbied hard, arguing that letting doctors own hospitals would create conflicts of interest and “cherry-picking” of profitable patients. Whether or not those arguments were fair, the outcome was that doctors as individuals lost a lot of ability to expand into owning hospitals. So YES--the affordable care act was eseentialy bought by lobbyists and resulted in banning doctors from owning hospitals!

Now, contrast that with what we’ve discussed: while individual doctors are barred from owning a hospital in many cases, corporate entities (including those very hospital corporations) have been allowed to buy up or control physician practices with relatively little resistance. It’s a striking double standard. Hospitals and corporate groups essentially argued “we must prevent undue physician influence in hospitals,” while simultaneously many of those same groups (or their investment arms) have been gaining “undue influence” over physician clinics. The American Hospital Association and others continue to fight any attempts to lift the ban on physician-owned hospitals. From a patient perspective, one might ask: who is looking out for my interests here? It appears the scales have been tipped to favor corporate consolidation (which arguably can hurt competition and patient choice) while stifling physician entrepreneurship.

This contrast is revealing because it underscores that current laws favor large incumbent interests, not necessarily patients or rank-and-file doctors. If hospitals worry that doctors owning hospitals is bad for patients (a very debatable point), shouldn’t we equally worry that corporations owning doctor’s offices is bad for patients? The latter has flown under the radar for years because it was done via loopholes, while the former was explicitly legislated. It’s an almost paradoxical situation: a group of cardiologists can’t build a small heart hospital in many states (to offer perhaps more tailored care), but a Fortune 500 corporation can employ hundreds of doctors through a web of MSOs and PCs and profit from every office visit.

Recognizing this double standard can galvanize both physicians and patients. It shines a light on how much influence corporate lobbying has in healthcare law – and how the pretext of “patient interest” can sometimes be used selectively to guard market share. As patients advocating for our own best interest, we should demand consistency: either everyone plays by the same rules, or at least the rules should clearly favor those arrangements that benefit patient care. There’s increasing discussion at the national level about revisiting these policies, and your awareness and voice can help ensure that the outcome isn’t one-sided. Ideally, the future will involve a more balanced approach where physician-led initiatives (whether clinics or hospitals) aren’t unfairly stifled, and corporate entities are properly checked when they try to overstep into medical decision-making.

The Tide Is Turning: Stronger Enforcement and New Laws

Encouragingly, in the past couple of years, state lawmakers and regulators have started to take action to close the loopholes in CPOM enforcement. The routine bypassing of CPOM, especially by private equity-backed groups, has not gone entirely unnoticed. Several states have either passed or introduced legislation to reassert the primacy of patient-centered, physician-directed care in the face of growing corporate influence.

For example:

California – which already had one of the stricter CPOM regimes – saw a bill introduced to explicitly crack down on private equity control. The proposal (SB 351) aimed to bar private equity or hedge fund-owned MSOs from interfering in clinical decisions or controlling key aspects of practices (like owning patient records or dictating how many patients a doctor must see). It also would give the state Attorney General power to enforce these rules. This legislation was a response to the realization that, despite existing laws, companies were finding wiggle room via MSOs. (As of the time of writing, California’s bill is in discussion, reflecting a growing intent to tighten oversight.)
Oregon – lawmakers came very close in 2024 to passing SB 951, a bill specifically designed to shut down the friendly PC loophole. This bill (reintroduced in 2025 after nearly passing) seeks to “ensure that medical practices retain de facto control over clinical and administrative operations”. It would prohibit MSOs from owning or controlling a medical practice, including banning arrangements where an MSO can restrict the transfer of a practice’s ownership (a common feature of those stock transfer agreements we discussed). Notably, Oregon’s proposal directly “prevents MSOs from installing ‘friendly’ physicians or otherwise subordinating the physician owners’ control to the MSO”. It also addresses non-competes and requires that physician owners be actively practicing in-state – no more out-of-state paper owners. This could serve as a model for other states if enacted.
Washington and Vermont – have similarly looked at tightening their laws. Both states considered bills to require that any PC owner be licensed and practicing in that state (closing the multi-state owner tactic). They also sought to forbid physician owners from simultaneously having roles in the MSO that manages their practice. Vermont’s bill even tried to ensure that if anyone has a stake in both the PC and MSO, that stake is majority and singular – aiming to eliminate complex multi-ownership webs. These changes strike at the heart of the cozy relationships that MSO structures exploit.
Massachusetts – took a slightly different route by focusing on transparency and oversight. In 2025, a law was enacted to require robust ownership reporting for healthcare organizations, explicitly including MSOs and private equity investors. Corporations investing in provider practices must disclose these ties and even testify publicly about their impacts on cost and care. While this doesn’t ban certain structures outright, it shines a light on them. The idea is that with more transparency, regulators and the public can more easily spot if a practice is being unduly controlled by non-physicians, and thus apply pressure or enforce existing laws. It’s a way of saying, “if you’re going to do it, you can’t do it in secret anymore.”

Beyond individual states, there’s increasing chatter at the national level among physician organizations and even the Federal Trade Commission (FTC) about the ramifications of private equity in healthcare. The FTC has signaled interest in the anti-competitive aspects of these acquisitions, and while CPOM is a state issue, a federal spotlight can influence state actions. The American Medical Association (AMA), for its part, has been advocating for upholding CPOM principles and warning about the corporatization of medicine. All of this suggests momentum toward reclaiming some of the ground lost to the loopholes.

For patients, these legal developments are positive signs. They indicate that lawmakers have heard concerns about how the corporate stealth ownership of practices could harm patient care or inflate costs. If you live in a state considering such legislation, supporting those efforts (by contacting your representatives, for instance) can help push them over the finish line. Enforcement is also key – even the best laws mean little if not enforced. We’ve seen CPOM laws on the books that were skirted around; the hope now is that with clearer rules and empowered regulators, enforcement will have more bite. Patients can play a role here by reporting suspicious arrangements or poor care experiences that might stem from corporate interference. State medical boards, attorneys general, and health departments can investigate CPOM violations, especially if they suspect a practice is “fraudulently organized” (a term some states use for violations). Patient complaints can trigger such scrutiny.

In essence, the tide is beginning to turn against the unfettered corporate practice of medicine in disguise. It’s an evolving landscape – some in the industry are actually proactively adjusting their structures in anticipation of stricter laws. The fact that these issues are being discussed in statehouses is itself a victory for those who believe medical care should be led by those with a healing mission, not profit-driven conglomerates.

As these laws tighten, some telehealth companies and investors might resist or lobby against them, claiming they impede innovation. But remember: true innovation in healthcare should ultimately be about delivering better care, not just delivering returns to investors. If an innovation can’t survive without skirting the fundamental ethics of medicine, one has to question its validity. The emerging regulations seek to ensure that innovation and investment in health tech can continue – just without undermining the core value that patients come first.

Conclusion: Putting Patients Back at the Center

The world of healthcare is changing rapidly, and telehealth is a wonderful advancement that is here to stay. But as we have uncovered, the marriage of profit-driven corporations with the practice of medicine – through loopholes and legal gymnastics – poses serious challenges to the principle that your health comes before their wealth. Corporate Practice of Medicine laws were meant to be a safeguard, a promise that when you’re in the virtual doctor’s “office,” it’s just you and your doctor. The reality today is that there can be an unseen third party in that room: the corporation that has figured out how to be the de facto owner of the practice.

We’ve explored how MSOs and friendly PCs have become a backdoor for corporate influence, and why that’s not just a quirky legal footnote, but a development with real consequences – from potential conflicts of interest in care, to higher costs, to a erosion of trust that is so vital in healing. It’s a situation that should make us disappointed, yes, but also determined. Determined to insist on a healthcare system that genuinely respects the patient-physician bond. Determined to support those practitioners who uphold that bond. And determined to push for laws and enforcement that keep the corporate horse from driving the clinical cart.

As patients, we hold more power than we might think. By being informed and choosing providers conscientiously, we can vote with our feet and wallets for physician-led care. By asking questions and demanding transparency, we signal that clandestine ownership and control is not okay. By supporting legislative fixes and the policymakers who champion them, we can help restore the spirit of CPOM laws so they work as intended. Already, several states are moving in the right direction, seeking to tighten CPOM enforcement and close loopholes. These efforts deserve our attention and backing because they ultimately protect us – the patients.

Finally, remember that healthcare is not just another business. It’s a trust, a calling, and a social good. The fact that physicians themselves are barred from certain ownership (like hospitals) due to concerns about ethics, yet corporations have been allowed in through side doors, tells us something is off balance. It’s time to right that balance. Not by rejecting all innovation or vilifying all business – but by insisting on patient-first governance of our healthcare delivery. The white coat should lead, and the suit should follow, in service of better care.

In closing, if you’re ever unsure about a telehealth service or medical practice, remember this simple advice: follow the ownership, and you’ll follow the incentives. Don’t hesitate to seek out care where those incentives align with your health. Your well-being is too important to be left in the dark or to be treated as a line on a spreadsheet. By staying informed and engaged, you can help ensure that the future of telehealth (and all healthcare) remains one where you and your physician work as a team – with no hidden corporate puppeteers interfering. Supporting physician-owned clinics and advocating for strong CPOM laws are concrete steps toward that future. Together, as empowered patients and principled providers, we can keep the heart of medicine beating strong, no matter how much the system around it may change.

The Telehealth Loophole: How Corporations Sidestep Patient Protection Laws