CPOM Compliance for Maryland Healthcare Startups
Maryland is more flexible than California on classic CPOM, but Health Occupations § 14-301 still requires a Board of Physicians license, and § 14-404(a)(15) still polices paying for patient referrals.
Get a Free CPOM AssessmentThe law in Maryland
Key authorities (official text)
Maryland Board of Physicians · Health Occupations Title 14 · Corps. & Assoc. Title 5, Subtitle 1Maryland Board of Physicians · Health Occ. § 14-301 · § 14-601 · § 14-404 · CA § 5-101 · § 5-105 · § 5-112.
Maryland CPOM is Moderate. The state does not copy California Business & Professions Code § 2400. Official text of Health Occ. § 14-301 says an individual shall be licensed by the Board before the individual may practice medicine in this State. § 14-601 makes unlicensed practice unlawful. That is a license-to-practice rule, not a B&P 2400 clone. Commentators who cite Health-General § 14-401 as Maryland’s CPOM statute are in the wrong article: physician licensure is Health Occupations Title 14; professional corporations are Corporations & Associations Title 5, Subtitle 1. Baltimore and DC-corridor digital-health diligence still wants a physician-owned PC plus a fair-market-value MSA.
Maryland is not permission for a lay LLC to hold itself out as practicing medicine. Title 14 licenses people, not operating companies. A medical-director title on a Delaware company does not satisfy § 14-301. The Board of Physicians disciplines licensees under § 14-404. Hospital, licensed-facility, and HMO employment exceptions exist in Maryland practice and do not stretch to a typical venture-backed telehealth company. Confirm those exceptions with counsel.
Professional corporations sit in CA § 5-101 et seq. § 5-105 says a corporation may render professional services in the State only through individuals licensed or otherwise authorized to render those services. § 5-112 is how a corporation elects professional-corporation status. Collaboration for NPs/PAs is a different job from owning the Professional Corporation. See collaborating physician vs physician PC owner. Longer narrative: Maryland CPOM blog guide.
Typical PC / MSO structure in Maryland
Form a Maryland professional corporation under CA Title 5, Subtitle 1, owned by a Maryland-licensed MD or DO. The MSO, often the Delaware operating company, provides non-clinical services under a written MSA at fair market value. Clinical revenue lands in the PC. Foundry forms that structure ($15,000) and matches a friendly PC owner ($3,000/mo). Not a rented Super PC.
If you also treat California, New York, New Jersey, or Virginia patients, Maryland’s Moderate label does not control those states. Start with the CPOM 50-state guide and form for the footprint you actually have. Neighboring Virginia is Limited, not a substitute memo.
When you still need a PC vs only an MSO
Use this as an operator rule, not a filing opinion. Confirm with counsel.
| Maryland fact pattern | Typical entity | Why |
|---|---|---|
| Maryland-only, cash-pay, physician already owns the practice | May stay on the existing professional corporation | Still document clinical control and FMV admin if an MSO is in the picture |
| Venture-backed or multi-state telehealth that includes Maryland | Maryland-aware physician PC + FMV MSA | Buyers and payers test CPOM compliance the same way they do in strict states |
| Maryland plus California, New York, or New Jersey | Form for the strict / moderate states, then qualify Maryland | Maryland’s Moderate label does not soften B&P 2400, BCL § 1507, or N.J.A.C. 13:35-6.16 |
Fee-splitting note
Health Occ. § 14-404(a)(15) lets a disciplinary panel reprimand, place on probation, suspend, or revoke a license if the licensee “pays or agrees to pay any sum to any person for bringing or referring a patient or accepts or agrees to accept any sum from any person for bringing or referring a patient.” § 14-404(a)(14) covers soliciting professional patronage through an agent. A percentage-of-collections management fee is the pattern that looks most like a split of professional fees. Prefer a fixed or FMV-supported admin fee. Pair this page with the fee-risk table on CPOM compliance.
| Maryland pattern | Risk | Safer pattern |
|---|---|---|
| Lay LLC holds itself out as practicing medicine | High: § 14-301 / § 14-601 license overlay | Licensed-professional corporation under CA Title 5, Subtitle 1 |
| MSO paid % of professional collections | High: § 14-404(a)(15) overlay | Fixed FMV admin fee with a memo |
| Cite Health-Gen. § 14-401 as the CPOM statute | Wrong article: diligence teams notice | Health Occupations Title 14 + CA Title 5 |
| Physician PC + FMV MSA + separate books | Base case | Revisit FMV when volume changes |
What Maryland founders need to know
- Maryland is Moderate, not “no CPOM.” § 14-301 / § 14-601 are license rules; do not invent a B&P 2400 analogue.
- § 14-404(a)(15) is the referral-pay overlay even when classic CPOM commentary is light.
- Cite Health Occupations Title 14 and CA Title 5, Subtitle 1, not Health-General § 14-401, as the working statutes.
- Baltimore / DC-corridor health-tech diligence still asks who owns the PC, who bills, and how the MSA is priced.
- Foundry does not drop clients into a plug-in 50-state PC. Multi-state needs a 50-state licensed physician.
Operational checklist: CPOM compliance. Setup path: MSO-PC formation ($15,000). Full map: CPOM 50-state guide. Book a call from the homepage.
Maryland CPOM FAQ
Does Maryland have strict CPOM?
Maryland is Moderate / more flexible than California or Texas. There is no B&P § 2400 analogue. Health Occ. § 14-301, § 14-601, § 14-404(a)(15), and CA Title 5, Subtitle 1 still expect licensed control of medicine and clean fees. Foundry keeps Maryland as Moderate on the CPOM 50-state guide.
Do I still need an MSO-PC in Maryland?
Yes for most venture-backed and multi-state models. The professional entity holds clinical care; the MSO is paid fair market value for non-clinical services.
How does Maryland treat fee-splitting?
§ 14-404(a)(15) is the referral-pay overlay. A percentage-of-collections MSA is the high-risk pattern. Prefer a fixed FMV admin fee.
How does Foundry help with Maryland CPOM?
MSO-PC formation is $15,000 one-time. A Maryland-licensed physician PC owner is $3,000/mo. Foundry is not a law firm.