Colorado Healthcare Defense Lawyers Need to Know:

The rise of telehealth startups, management services organizations, and hybrid care models along with the typical structure of corporate healthcare entity has placed the Corporate Practice of Medicine (CPOM) doctrine at the center of disputes that routinely land on a healthcare defense lawyer’s desk. The CPOM doctrine isn’t just a regulatory concept, it is a defense tool that shapes (and curbs) exposure. In this article I will briefly preview what CPOM doctrine is, why it’s uniquely important in Colorado, and how it affects a healthcare defense practice. The takeaway being that all healthcare defense attorneys in Colorado should have this doctrine under their belt.

Before I get into what the CPOM doctrine is, I want to outline the typical scenario in which a healthcare defense attorney finds themselves, and why this scenario should trigger the CPOM doctrine defense.

Scenario: A new lawsuit comes in. A patient is bringing a negligence claim against your client [Insert Medical Corporation/Entity Here]. A closer look at the complaint shows that Plaintiff is alleging the medical corporation is responsible for their injuries and vicariously liable for the actions of the Doctor who treated them.

This scenario should ring off alarm bells in a healthcare defense attorney’s mind. Why? The CPOM doctrine, of course. So, what exactly is the doctrine, and how do courts apply it in Colorado?

CPOM Doctrine Big Picture:

1. CPOM doctrine prohibits corporations and lay entities from practicing medicine or interfering with a physician’s independent medical judgement. In turn, corporations and lay entities cannot be held responsible for the medical judgement of their providers.
2. CPOM presents limits on administrative contracts that stray into clinical authority.
3. CPOM protects the public by ensuring medical decisions are made solely by licensed providers (and not corporations and lay entities).

Colorado’s Corporate Practice of Medicine Doctrine:

It is well established under Colorado’s Corporate Practice of Medicine doctrine that corporate entities, such as hospitals, do not practice medicine and cannot be liable for the actions of the physicians who practice at the hospital.^[1] Only a person, not a corporation, can practice medicine.^[2],[3] A corporate entity, such as the Clinic, cannot practice medicine, express medical opinions, or make medical diagnoses.

Under this doctrine, a corporation such as a clinic or hospital may not perform medical services or interfere with a physician’s independent medical judgment.^[4],[5]

A corporation has no legal ability to control the actions of a physician in practicing medicine, and therefore, a corporation cannot be vicariously liable for the actions of a physician.^[6],[7],[8]

A strategic approach: CPOM doctrine and Motions to Dismiss

Plaintiffs have started leaning on the Corporate Practice of Medicine doctrine as a way to keep weak claims alive, but most of those allegations fall apart at the motion-to-dismiss stage. The key point to remember is that CPOM is a regulatory framework, not a standalone tort, and it does not give private litigants a direct cause of action. Still, complaints often include a few vague lines about a lay entity “controlling” medical decisions or a business model that “violates CPOM” with no concrete facts showing actual interference with a provider’s judgment. That kind of pleading isn’t enough. At the motion-to-dismiss stage, defense counsel should argue that CPOM cannot independently support liability unless the plaintiff pleads a separate, recognized duty and a factual nexus between that duty and the alleged injury. Without those well-pled facts, CPOM-based claims should be dismissed because they merely restate legal conclusions and attempt to convert a regulatory framework into a private damages remedy that Colorado law does not permit.

Takeaway:

Ultimately, the Corporate Practice of Medicine doctrine should be treated for what it is: a regulatory principle, not a free-standing basis for civil liability. When plaintiffs rely on CPOM without tying it to a distinct legal duty or specific factual allegations, those claims are well-suited for early dismissal. A clear motion to dismiss that frames CPOM within its proper limits can streamline the case, reduce unnecessary discovery, and keep the litigation focused on viable theories. For defense lawyers handling healthcare matters, recognizing when CPOM is being misused, and addressing it upfront, can make a meaningful difference in the trajectory of the case.

In the end, knowing how to frame CPOM correctly isn’t just helpful—it’s a strategic necessity.

Sources:

[1] Harper ex rel. al-Hamim v. Denver Health, 140 P.3d 273, 275 (Colo. App. 2006) (“The corporate practice of medicine doctrine is a common law principle that recognizes ‘it is impossible for a fictional entity, a corporation, to perform medical actions or be licensed to practice medicine.”)

[2] Pediatric Neurosurgery, P.C. v. Russell, 44 P.3d 1063, 1067 (Colo. 2002) (rev’d on other grounds by statute)

[3] C.R.S.  § 12-240-138(6)(a) (“Corporations shall not practice medicine.”)

[4] Harper, 140 P.3d at 275; see also C.R.S. § 25-3-103.7(3) (“[A corporate entity cannot] limit or otherwise exercise control over the physician’s independent professional judgment concerning the practice of medicine or diagnosis or treatment[.]”)

[5] Nieto v.  State, 952 P.2d 834, 840 (Colo. App.  1997) (A corporation “cannot command or forbid any act by a doctor”), rev’d on other grounds, 993 P.2d 493

[6] Daly v. Aspen Ctr. for Women’s Health, Inc., 134 P.3d 450, 452 (Colo. App. 2005) (The corporate practice of medicine doctrine “shield[s] corporations from vicarious liability for the negligent acts of their physicians.”)

[7] Nieto, 952 P.2d at 840 (“[A]n entity employing a doctor cannot be held liable for a doctor’s negligence based on respondeat superior.”)

[8] Hall v. Frankel, 190 P.3d 852, 861 (Colo. App. 2008) (Hospitals and health care corporations “may not be held vicariously liable for the negligence of their employed or contracted physicians because, as a matter of law, they are unable to control the medical practice of those physicians.”)