> ## Documentation Index > Fetch the complete documentation index at: https://mso.getlemma.com/llms.txt > Use this file to discover all available pages before exploring further. # Run a CPOM self-audit > A scored checklist walkthrough of the functional indicia regulators examine (who employs, who owns records, who decides, and where the money sits), with remediation. 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](/reference/legal/states/california) ## 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](/reference/legal/cpom-legislation-tracker). ## Scoring and remediation | 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 | A finding with no recorded fix is worse than no audit. ## 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 ## Related topics - [Hire healthcare counsel (and use them well)](/guides/agreements/get-agreements-reviewed.md) - [Maintain corporate formalities](/guides/formation/maintain-corporate-formalities.md) - [Move money between PC and MSO (the right way)](/guides/banking/move-money-mso-pc.md) - [The corporate practice of medicine doctrine](/concepts/model/cpom.md) - [What an MSO can and can't do](/concepts/model/what-msos-can-and-cant-do.md) - [Enforcement, and what happens when structures fail](/concepts/model/enforcement-and-risk.md) - [California — CPOM & MSO reference](/reference/legal/states/california.md) - [CPOM & MSO legislation tracker](/reference/legal/cpom-legislation-tracker.md) - [MSA clause anatomy](/reference/legal/msa-clause-anatomy.md)