CPOM Compliance for Michigan Healthcare Startups
Michigan writes CPOM into statute more clearly than most Midwestern states: the Public Health Code plus the Business Corporation Act’s professional corporation chapter. Clinical staff belong in the physician-owned PC.
Get a Free CPOM AssessmentThe law in Michigan
Key authorities (official text)
Michigan Board of Medicine · MCL 333 · MCL 450.1284Michigan Board of Medicine (LARA) · Public Health Code MCL 333.1101 · MCL 333.16221 · Business Corporation Act ch. 2A (professional corporations), MCL 450.1281 et seq..
Michigan CPOM is moderate. The Public Health Code (MCL 333.1101 et seq.) governs who may practice medicine. The professional corporation chapter of the Business Corporation Act (MCL 450.1281 et seq.) expects a medical professional corporation to be owned by persons licensed to render that service. Hospital, nonprofit-foundation, and licensed-HMO exceptions are real and narrow; they do not cover a venture-backed telehealth company. Detroit and Ann Arbor diligence still wants a physician-owned PC, clinicians on the PC payroll, and a fair-market-value MSA.
Michigan is more explicit than Ohio. Do not recycle an “Ohio is permissive” memo into a Michigan data room. MCL 450.1284 is an ownership rule. The Board of Medicine’s authority to discipline under the Public Health Code (including MCL 333.16221) is how control problems become license problems. A medical-director title on the MSO is not ownership.
Named exceptions (licensed hospitals, certain nonprofit foundations, and HMOs licensed under Michigan’s HMO act) are not startup workarounds. If you are not that licensed entity, form a physician-owned PC. Collaboration for NPs/PAs is a different job from owning the Professional Corporation. See collaborating physician vs physician PC owner. Longer narrative: Michigan CPOM blog guide.
Typical PC / MSO structure in Michigan
Form a Michigan professional corporation under MCL 450.1281 et seq. owned by a Michigan-licensed MD or DO. The PC bills for care and employs or contracts the clinicians who deliver it. The MSO (often the Delaware operating company) provides non-clinical services under a written MSA at fair market value. Foundry forms that structure ($15,000) and matches a friendly PC owner ($3,000/mo). Not a rented Super PC.
Telehealth into Michigan is the practice of medicine in Michigan. An out-of-state platform treating Michigan patients still needs a Michigan-aware professional entity and a Michigan-licensed (or IMLC-covered) physician owner. If you also treat California or New Jersey patients, start with the CPOM 50-state guide and form for the whole footprint.
When you need a PC vs only an MSO
Use this as an operator rule, not a filing opinion. Confirm with counsel.
| Michigan fact pattern | Typical entity | Why |
|---|---|---|
| Licensed Michigan hospital employing physicians | Hospital employment exception may apply | Does not extend to a digital-health operating company |
| Venture-backed or telehealth treating Michigan patients | Michigan PC (MCL 450.1284) + FMV MSA | Clinicians on the PC; MSO stays non-clinical |
| Michigan plus California or New Jersey | Form for the strict states, then qualify Michigan | MCL 450.1284 does not soften B&P 2400 or N.J.A.C. 13:35-6.16 |
Fee-splitting and employment note
The high-risk Michigan pattern is clinicians on the MSO payroll plus a percentage-of-collections MSA. Keep treating clinicians on the PC. Prefer a fixed FMV admin fee. Pair this page with the fee-risk table on CPOM compliance.
| Michigan pattern | Risk | Safer pattern |
|---|---|---|
| Lay equity in the clinical entity | High: MCL 450.1284 ownership | Licensed-physician PC / PLLC |
| MSO employs treating clinicians | High: Public Health Code control | PC employs or contracts clinicians |
| MSO paid % of professional collections | High: fee-split / unprofessional-conduct overlay | Fixed FMV admin fee with a memo |
| Physician PC + FMV MSA + separate books | Base case | Revisit FMV when volume changes |
What Michigan founders need to know
- Michigan is moderate and statutory. Read MCL 333.1101 et seq. and MCL 450.1281 et seq. Do not infer the rule from a Yes/No blog.
- Hospital / nonprofit / licensed-HMO exceptions are real and do not cover investor-backed telehealth.
- Clinical employees belong on the PC. Dual-role staff with a clinical dimension usually do too.
- Detroit / Ann Arbor diligence still asks who owns the PC, who is on which payroll, 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.
Michigan CPOM FAQ
Does Michigan have strict CPOM?
Michigan is moderate and unusually explicit. The Public Health Code plus MCL 450.1284 expect a physician-owned professional entity. Hospital, nonprofit-foundation, and licensed-HMO exceptions do not cover digital health. See the CPOM 50-state guide.
Can the MSO employ Michigan clinicians?
No as a working rule. Treating clinicians should be employed or contracted by the physician-owned PC. The MSO stays non-clinical.
How does Michigan treat fee-splitting?
Board discipline and Public Health Code unprofessional-conduct rules sit on top of ownership. A percentage-of-collections MSA is the high-risk pattern. Prefer a fixed FMV admin fee.
How does Foundry help with Michigan CPOM?
MSO-PC formation is $15,000 one-time. A Michigan-licensed physician PC owner is $3,000/mo. Foundry is not a law firm.