Opinion ID: 2543369
Heading Depth: 2
Heading Rank: 2

Heading: The Corporate Practice of Medicine Doctrine and Professional Corporations

Text: As background, we begin with a brief review of the corporate practice of medicine doctrine. Until 1963, the corporate practice of medicine doctrine absolutely barred doctors in Colorado from practicing medicine through corporations. Rosane, 112 Colo. 363, 149 P.2d 372; Moon, 150 Colo. 430, 373 P.2d 944; R. Crawford Morris & Alan R. Moritz, Doctor and Patient and the Law 376-78 (5th ed.1971). The doctrine rests on the principle that only a person, not a corporation, may practice medicine because it is impossible for a fictional entity, a corporation, to perform medical actions or be licensed to practice medicine. Therefore, a corporation or employing entity may not interfere with a doctor's independent medical judgment. The corporate practice of medicine doctrine has historically been used by this court in cases such as Rosane and Moon to preclude hospitals from being held vicariously liable for the negligent acts of doctors. The doctrine stems from a concern that corporations have distinct interests from those of doctors and that patients will receive inferior care if corporations have any control over physicians' medical judgment. Bruce A. Johnson, The Corporate Practice of Medicine: A Trap for the Unwary, 20 Colo. Law. 2503, 2503 (1991). It is presumed that allowing corporations to employ physicians will force physicians to sacrifice concerns for patient care for those of a corporation that is presumably most concerned with profits and shareholder satisfaction. Id. The corporate practice of medicine doctrine has historically had the effect of requiring doctors to practice as sole practitioners or in partnerships. Under the dictates of the doctrine, doctors in Colorado generally have had independent contractor relationships with the corporations, such as hospitals, for whom they work. Allen Sparkman, Choice of Entity for Healthcare Professionals, 29 Colo. Law. 81, 81 (2000). Since 1995, hospitals in Colorado have been able to employ doctors under section 25-3-103.7(2), 8 C.R.S. (2001) (amendment effective July 1, 1995). However, section 25-3-103.7 explicitly provides that corporations may not control a doctor's independent medical judgment, and therefore does not entirely eviscerate the corporate practice of medicine doctrine. § 25-3-103.7(3), 8 C.R.S. (2001); G. Lane Earnest & Sarah E. Meshak, The Physician as the Hospital's Employee: S.B. 95-212, 24 Colo. Law. 2345, 2347 (1995).