Legal guidance emerges on restructuring medical and med spa MSOs post-CPOM enforcement; compliance and deal structure now inseparable.
McDermott Will & Schulte has published guidance on restructuring medical and med spa MSOs in response to heightened Corporate Practice of Medicine (CPOM) enforcement. The advisory signals that the CPOM crackdown—which has targeted PE-backed roll-ups and management services organizations operating across state lines—is forcing material changes to deal architecture and operational governance.
CPOM doctrine, enforced unevenly but increasingly by state medical boards, prohibits non-physicians from owning or controlling medical practices. Many MSOs skirted this by claiming they provided only "administrative" services while physicians retained clinical control. Regulators have grown skeptical. The McDermott guidance suggests that surviving structures now require genuine physician governance, transparent fee-splitting, and state-by-state compliance mapping—all of which increase deal complexity and reduce the financial leverage that made roll-ups attractive.
CPOM enforcement is forcing MSO restructuring; physician governance and state compliance now non-negotiable.
For practice owners considering MSO affiliation or exit, this means higher legal costs, longer diligence timelines, and potentially lower valuations. The easy arbitrage of scale without physician control is closing. Deals that survive will be those with clean physician ownership, clear delegation protocols, and board-level clinical oversight.
Source: original report ↗
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