As noted in Ketamine Due Diligence: What A Buyer Should Know – Part 1, we have worked on several Ketamine clinic acquisitions, and one of the most important aspects of any deal is due diligence. This post will discuss some of the state healthcare regulatory issues a buyer will want to focus on for a ketamine deal.
Corporate Practice of Medicine Doctrine
One of the issues a buyer will need consider is the corporate practice of medicine (“CPOM”) doctrine. This is uniquely a state issue, and each state has a different regulatory regime. For some states, like Arizona, the CPOM doctrine is loosely defined by common law. On the other end of the spectrum, states like California have a strict regulatory and statutory scheme for CPOM issues.
At its core, the CPOM doctrine seeks to prevent non-healthcare professionals from making medical decisions or decisions that impact a provider’s practice. For example, if Buyer is a publicly held corporation, would a provider want Buyer directing the provision of care by the provider? Would a provider be ok if Buyer decided to stop carrying certain products because the margins are not large enough? Aside from the CPOM doctrine, providers have their own