By JENNIFER COLAGIOVANNI & CHRISTIAN IERACI, Wachler & Associates, P.C.
Michigan recently revised its Corporate Practice of Medicine laws to 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. As a result of these recent changes, chiropractors are now generally permitted to form professional corporations (PC) and professional limited liability companies (PLLC) with physicians and podiatrists without violating Michigan’s Corporate Practice of Medicine laws.
Corporate Practice of Medicine
In general, Corporate Practice of Medicine occurs when a corporate entity practices medicine, as opposed to an individual licensed 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.
While states vary as to the degree in which they restrict the Corporate Practice of Medicine, these prohibitions are often rooted in the “learned profession doctrine.” The “learned profession doctrine,” as outlined by in a 1980 Michigan Attorney General Opinion, reasons:
- Laypersons should not be permitted, directly or indirectly by virtue of the corporate form, to practice medicine;
- Necessary confidential and professional relationships existing between a physician and his/her patient could be destroyed by lay shareholders interested only in a profit;
- The limited liability of the corporate form is not appropriate where the client must place such a high degree of trust and confidence in the physician; and
- It is impossible for a corporation to fulfill the licensing and ethical requirements medical practice demands.
Corporate Practice of Medicine prohibitions and regulations are one of the primary reasons that physicians form physician groups or professional corporations where all officers of the PCs and members/managers of the PLLCs are licensed to provide the professional medical services rendered by the entity.
Recent Changes in Michigan
While a comprehensive history of Corporate Practice of Medicine in Michigan is beyond the scope of this article, until these recent changes, Michigan generally required that only medical doctors (MDs), doctors of osteopathic medicine and surgery (DOs), and podiatrists (DPMs) could be shareholders of a PC or members or managers of a PLLC that rendered a professional service included in the Public Health Code. Physicians and podiatrists were also permitted to organize a PLLC or PC with one or more physician’s assistants, though physician’s assistants were not (and are not currently) permitted to form a PLLC or PC consisting of only other physician’s assistants.
Public Act 31 of 2022 and Public Act 32 of 2022 amended the Michigan Limited Liability Company Act and the Business Corporation Act respectively to allow one or more individuals licensed in chiropractic to organize a PLLC or PC with one or more individuals licensed in chiropractic, the practice of medicine, the practice of osteopathic medicine and surgery, or the practice of podiatric medicine and surgery. Likewise, the changes provide for one or more licensed chiropractors to organize a PLLC or PC with one or more licensed physician’s assistants, provided that a physician (MD or DO) is also a member of the entity. Prior to this change, chiropractors were not included among those who could organize with physicians and podiatrists as a 2004 Michigan Attorney General Opinion had concluded chiropractors had a different scope of practice from MDs and DOs. The opinion contrasted chiropractors with podiatrists pointing out that podiatrists were considered under the definition of “physician” under the Public Health Code and permitted to perform surgery.
The recent changes afforded by Public Act 31 of 2022 and Public Ac 32 of 2022 allows for chiropractors to maintain multidisciplinary practices with physicians and podiatrists by integrating the skills and knowledge of healthcare professionals. The Michigan Chiropractors Association has pointed to the potential benefits this multidisciplinary approach can provide, including the knowledge and skills that chiropractors bring in the area of conservative pain management without the use of pharmaceuticals.
While this change now allows chiropractors to have ownership interest in professional corporations and professional limited liability companies that include physicians, podiatrists, and physician’s assistants, it does not change the scope of care chiropractors are able to provide. Practitioners considering organizing multidisciplinary practices are advised to use care to ensure prospective compliance with the legal and regulatory requirements for maintaining ownership interest as well as payer reimbursement policies.