Foundational cases
Painless Parker v. Board of Dental Examiners
Citation: 216 Cal. 285, 14 P.2d 67 (1932) · Jurisdiction: California Supreme Court Holding: Addressed a commercial dental operation conducted under a trade name, in the context of California’s regulation of dental practice and licensure. One of the earliest and most-cited articulations of the corporate practice of dentistry doctrine. Why it matters: The foundational corporate-practice-of-dentistry case, and a reminder that dentistry’s doctrine developed alongside, and sometimes ahead of, medicine’s. Frequently cited in DSO structuring analysis.People v. Pacific Health Corp.
Citation: 12 Cal. 2d 156, 82 P.2d 429 (1938) · Jurisdiction: California Supreme Court Holding: Applied the corporate practice prohibition to a corporation furnishing medical services through employed physicians. Why it matters: Established California’s position on lay corporations delivering medical care through employed physicians, the direct ancestor of why California requires a professional corporation and why SB 351 (2025) codified and extended the doctrine.Bartron v. Codington County
Citation: 68 S.D. 309, 2 N.W.2d 337 (1942) · Jurisdiction: South Dakota Supreme Court Holding: A widely quoted articulation of the rationale for the corporate practice doctrine, addressing the concern that lay control of medical practice divides the physician’s loyalty and commercializes professional judgment. Why it matters: Frequently cited across jurisdictions for the doctrine’s underlying policy rationale rather than for a narrow rule. Useful for understanding why courts care, which is what modern statutes have codified.Neill v. Gimbel Brothers, Inc.
Citation: 330 Pa. 213, 199 A. 178 (1938) · Jurisdiction: Pennsylvania Supreme Court Holding: Addressed a lay corporation providing optometric services, holding that a corporation may not practice a licensed profession through employed practitioners. Why it matters: Pennsylvania’s foundational corporate practice case, and one of the leading early cases applying the doctrine to optometry, relevant to the retail-optical analysis. See Optometry and vision.Ezell v. Ritholz
Citation: 188 S.C. 39, 198 S.E. 419 (1938) · Jurisdiction: South Carolina Supreme Court Holding: Applied corporate practice principles to a lay-owned optical business employing licensed practitioners. Why it matters: Cited in South Carolina and elsewhere for the proposition that the corporate form does not permit indirect practice of a licensed profession.Modern narrowing and exceptions
Berlin v. Sarah Bush Lincoln Health Center
Citation: 179 Ill. 2d 1, 688 N.E.2d 106 (1997) · Jurisdiction: Illinois Supreme Court Holding: Held that a licensed hospital may employ physicians without violating the corporate practice of medicine doctrine, recognizing a hospital-employment exception. Why it matters: The leading modern case recognizing an institutional exception, and the reason hospital employment is a viable alternative structure in Illinois and, by analogy in reasoning, elsewhere. Note the exception is institutional and narrow — it does not extend to lay corporations generally. See Alternatives to MSO-PC.Isles Wellness, Inc. v. Progressive Northern Insurance Co.
Citation: 703 N.W.2d 513 (Minn. 2005) · Jurisdiction: Minnesota Supreme Court Holding: Addressed the application of the corporate practice doctrine to chiropractic and physical therapy clinics, in litigation brought in the insurance-reimbursement context. Why it matters: Establishes that the doctrine is not confined to medicine, and that it can be raised by insurers contesting reimbursement, the same vector later used in Northfield. Important for PT, chiropractic, and other allied-health structures. See Physical therapy and chiropractic.The modern warning shots
Allstate Insurance Co. v. Northfield Medical Center, P.C.
Citation: 228 N.J. 596, 159 A.3d 412 (2017) · Jurisdiction: New Jersey Supreme Court Links: Opinion (N.J. Courts) · CourtListener Facts: A management company owned and operated by a chiropractor provided administrative services to a medical corporation the chiropractor had formed, owned on paper by a licensed physician who never actually practiced there. The physician-owner executed “captive” documents that effectively allowed the management company to remove and replace him at will. Holding: The court adopted a broad interpretation of the knowledge element a plaintiff must demonstrate under New Jersey’s Insurance Fraud Prevention Act, allowing the insurer to pursue recovery of payments made to the practice. Why it matters, the most important modern case for MSO-PC design:- Substance over form. The structure was papered. The paper was the problem, because of what it actually permitted.
- The enforcement vector is the payer, not the board. This was an insurer suing to claw back paid claims, a materially larger financial exposure than a licensing fine, and available to any payer that concludes it paid an unlawfully structured practice.
- The specific red flags, an owner who never practices, and at-will removal by the management company, remain the two clearest indicators of a defective structure.
American Academy of Emergency Medicine Physician Group, Inc. v. Envision Healthcare Corp.
Citation: Filed December 2021 in California Superior Court (Contra Costa County); litigated in the U.S. District Court for the Northern District of California, No. 3:22-cv-00421 · Status: voluntarily dismissed July 23, 2024 Links: AAEM-PG case page · Holland & Knight analysis Facts: AAEM-PG alleged that Envision Healthcare, a lay entity owned by private equity firm KKR, violated California’s prohibition on the corporate practice of medicine through its emergency medicine staffing model. Procedural history: The court denied Envision’s motion to dismiss in June 2022, allowing the case to proceed. AAEM-PG filed a stipulation of voluntary dismissal on July 23, 2024, after Envision agreed to withdraw from emergency department operations in California. Terms were confidential and reportedly included partial reimbursement of AAEM-PG’s fees and costs, an agreement not to enforce restrictive covenants, and tail insurance coverage for affected physicians. Why it matters, read the outcome in both directions:- No court held the friendly PC model unlawful. The case settled before judgment, and commentators noted the model survived California litigation intact.
- A national company exited an entire state’s line of business rather than litigate to judgment.
Attorney general opinions and agency positions
AG opinions are not binding law but are strongly predictive of enforcement posture, and in several states they are the primary articulation of the doctrine.
That last entry is worth noting specifically: it reflects an enforcement authority treating the standard structural toolkit as the problem, rather than only obvious sham arrangements.
How to read a CPOM case
A short method for evaluating whether a case is relevant to your structure:- What profession? Medicine, dentistry, optometry, and chiropractic have separate doctrines that can differ in the same state.
- What was the vector? A licensing board action, an insurer’s clawback suit, a contract dispute, or a qui tam. The vector determines the remedy and the exposure.
- What facts drove the holding? Look for the functional indicia, who employed, who owned records, who could remove the owner, where the money went. Those map onto your own self-audit.
- Has legislation superseded it? Oregon, California, and Vermont have all codified since 2025. A 2015 case may be less informative than the 2025 statute.
- Is it precedent, or a settlement? A voluntary dismissal sets no precedent, however loud the outcome.
Sources
- DLA Piper, Corporate practice of medicine enforcement: New pressure points and a path forward (July 2026).