Run a CPOM self-audit

A CPOM self-audit tests whether your structure holds up in substance, not just on paper. Run it annually and immediately after any state law change. It is the highest-return compliance activity available to an MSO-PC group, and it takes a day. Run this with healthcare counsel involved, at least for scoring and remediation. And consider whether the work should be conducted under privilege — a self-audit that documents problems and is later produced in litigation is worse than no self-audit. Ask counsel before you start.

Prerequisites

The MSA and full agreement stack
Board minutes for both entities
Bank account signer and access lists
Org chart showing who employs whom
Marketing materials and website
Your state pages: CPOM by state

The audit

Score each item Pass / Concern / Fail. Any Fail is a remediation item with a date.

1. Employment

Question	Pass looks like
Who employs the clinicians?	The PC, on PC-issued W-2s, paid from the PC’s account
Who employs clinical support staff?	Per your state’s analysis, documented
Who employs non-clinical staff?	The MSO
Do employees know which entity employs them?	Yes, offer letters, W-2s, and org chart agree
Who signs clinician employment agreements?	The PC’s officer

2. Medical records

Question	Pass looks like
Who owns the patient records?	The PC, stated in the MSA
Who controls access and release?	The PC
What happens to records on MSA termination?	The PC retains them; the MSA says so
Does the MSO’s EHR contract acknowledge PC ownership?	Yes

3. Clinical authority

Question	Pass looks like
Who sets clinical protocols and standards of care?	The PC, with board minutes evidencing it
Who makes clinical hiring and termination decisions?	The PC, documented decisions, not rubber stamps
Who determines patient volume, visit length, or clinician hours?	The PC. California’s SB 351 names these specifically.
Who selects diagnostic tests and determines referral necessity?	The clinician
Who assigns diagnosis and procedure codes?	The PC. SB 351 and Oregon SB 951 both name coding.
Who selects clinical equipment and supplies?	The PC specifies; the MSO procures
Who conducts clinical peer review?	The PC

4. Money

Question	Pass looks like
Where do payer EFTs land?	The PC’s operating account
Where do patient payments settle?	The PC’s account
Who is the signer on the PC’s accounts?	The PC’s licensed officer
Does the MSO have withdrawal authority over PC accounts?	No. No standing sweep, no ACH debit authorization, no MSO signer.
How does the management fee move?	On an invoice, paid by the PC, after clinical payroll
Is the fee paid in cash, or accrued indefinitely?	Paid in cash
Are there any shared accounts?	No
Are there transfers with no invoice or note?	No

5. The fee

Question	Pass looks like
Is the structure lawful in each PC’s state?	Confirmed with local counsel, documented
Is there current FMV documentation?	Yes, within 12 months
Does the fee leave the PC able to pay its obligations?	Fee-coverage ratio above 1.0, not just during the ramp
Has the fee ever been repriced retroactively?	No

6. Governance and formalities

Question	Pass looks like
Does the PC have a minute book with current-year consents?	Yes
Do the minutes evidence clinical governance by the owner?	Yes, protocols, staffing, quality
Are all entities in good standing in every state?	Yes
Are officers and directors licensees where required?	Yes
Has the agreement stack been reviewed in the last 12 months?	Yes

7. The friendly owner

Question	Pass looks like
Does the owner actually practice or perform documented duties?	Yes, with time records for the governance role
Could they describe the practice’s operations to a board investigator?	Yes
Do they have their own counsel?	Yes
Can the MSO remove them unilaterally, at will?	No
Is the transfer restriction drafted against current state law?	Yes
Is there a screened, willing successor?	Yes

8. Public presentation

Question	Pass looks like
Does the website say the practice provides care, not the MSO?	Yes
Does the card descriptor show the practice brand?	Yes
Do patient-facing materials identify the PC?	Yes
Does any material imply the MSO employs the clinicians?	No

9. State-specific

Question
Does your state have new MSO restrictions, Oregon, California, Vermont, or others?
Does your state require MSO or DSO registration?
Does your state have a transaction notice or review law you’ve triggered?
Does your state void physician noncompetes?
Is percentage-based fee compensation permitted?

Check the legislation tracker.

Scoring and remediation

Score every item

Triage the Fails

Severity	Examples	Timeline
Critical	MSO employs clinicians; MSO owns records; MSO controls PC bank account; shared accounts	Immediately
High	No invoice for the fee; MSO directs coding; owner cannot describe the practice; unilateral removal right	30 days
Medium	Stale FMV; missing minutes; marketing implies MSO care delivery	90 days
Low	Naming inconsistencies; documentation gaps	Next cycle

Assign an owner and a date to each remediation item

Document the remediation, not just the finding

A finding with no recorded fix is worse than no audit.

Re-audit annually, and immediately on any state law change

The one-question version

If you do nothing else:

If a state medical board interviewed your clinician-owner tomorrow and asked them to describe their authority over this practice, would their answer match your documents?

If yes, most of the rest follows. If the honest answer is “they’d say the MSO runs everything,” you have a structure that exists until someone looks at it.

Verify it worked

All nine sections scored
Counsel involved in scoring and remediation
Privilege question addressed before starting
Every Fail has an owner and a date
Remediation documented, not just findings
Board minutes updated to reflect clinical governance
Next audit calendared

Formation & Corporate

Agreements

Credentialing & Payer Enrollment

Billing Operations

Patient Payments & Refunds

Banking & Finance

Compliance Tasks

Run a CPOM self-audit

Prerequisites

The audit

1. Employment

2. Medical records

3. Clinical authority

4. Money

5. The fee

6. Governance and formalities

7. The friendly owner

8. Public presentation

9. State-specific

Scoring and remediation

The one-question version

Verify it worked

​Prerequisites

​The audit

​1. Employment

​2. Medical records

​3. Clinical authority

​4. Money

​5. The fee

​6. Governance and formalities

​7. The friendly owner

​8. Public presentation

​9. State-specific

​Scoring and remediation

​The one-question version

​Verify it worked

Prerequisites

The audit

1. Employment

2. Medical records

3. Clinical authority

4. Money

5. The fee

6. Governance and formalities

7. The friendly owner

8. Public presentation

9. State-specific

Scoring and remediation

The one-question version

Verify it worked