Telehealth’s Weight-Loss Boom and the Corporate Practice of Medicine

Telehealth weight-loss platforms offering rapid GLP-1 prescriptions have become one of the fastest-growing segments in healthcare. These platforms connect consumers with clinicians via virtual consultations to assess eligibility for drugs like semaglutide or tirzepatide. This model has attracted significant venture capital as demand surges. Yet, behind the glossy marketing and rapid expansion lies a longstanding legal principle that many companies are confronting anew: the corporate practice of medicine (CPOM).

The Old Doctrine Meets the New Model

The CPOM doctrine prohibits corporations and other non-physicians from practicing medicine, owning medical practices, or controlling physicians. Its core purpose is to ensure that licensed clinicians make medical decisions free from corporate influence, safeguarding the physician–patient relationship from conflicts of interest. Despite decades of healthcare consolidation and reform, CPOM remains a resilient guardrail.

To effectively navigate the CPOM laws, which vary significantly from state to state, most telehealth companies rely on a two-entity model. In this compliant MSO-PC model, a physician-owned professional corporation delivers medical services, while a separate management services organization (MSO) handles non-clinical functions such as marketing, technology, and administration. The professional entity must maintain full authority over medical decisions, including prescriptions. MSOs typically charge a flat management fee to avoid fee-splitting concerns. While compliant when properly structured, the line between “management” and “medicine” becomes harder to maintain as telehealth platforms scale nationally.

Recently, pharmaceutical companies have sued telehealth companies and affiliates for exerting undue influence over medical decisions. Common allegations include:

1. Allowing unlicensed individuals (e.g., executives or management companies) to influence clinical judgment;
2. Prescribing or altering GLP-1 formulations and dosages without prior physician examination or medical justification; and
3. Prioritizing financial gain over patient need in treatment decisions.

When Management Looks Like Medicine

Regulators increasingly question whether MSOs in weight-loss ventures control protocols, visit frequency, and prescription criteria. When management fees are tied to patient volume or revenue, arrangements resemble prohibited fee-splitting. Even if physicians nominally own practices, regulators assess functional control to determine who truly directs patient care. States with strong CPOM doctrines, including California, Texas, and New York, have taken particular interest in these digital models, viewing them as potential vehicles for unlicensed corporate control.

Why Weight-Loss Platforms Draw Scrutiny

Telehealth weight-loss businesses pose unique risks:

• GLP-1 Prescribing: Demand has surged, but supply shortages have led some platforms to offer compounded versions not approved by the FDA. The agency has issued warning letters citing misbranding and safety concerns.
• Marketing Practices: Aggressive advertising promising “rapid results” or guaranteed weight-loss attracts scrutiny from the FTC and state attorneys general.
• Multi-State Operations: Platforms often contract with physicians licensed in multiple states, creating complex jurisdictional and supervision issues.
• Clinical Oversight: State boards have flagged cases where prescriptions were issued without a proper physician-patient relationship or examination.

These factors amplify CPOM risk in the GLP-1 space, as regulators increasingly view ownership and operational structures through the lens of patient safety. The Alabama Attorney General recently sued a medical spa for allegedly administering research-grade GLP-1 drugs to patients without their knowledge or consent. These drugs were labeled “for research use only” and not approved for human consumption, which raises CPOM and scope-of-practice concerns. Prescribing in this way moves beyond routine prescribing into experimental medicine. Under CPOM principles, this heightens the need for physician oversight because experimental use demands rigorous oversight and informed consent.

Enforcement and Exposure

Once regulators identify CPOM or fee-splitting concerns, additional liabilities often follow. Non-physician-owned telehealth companies may have financial incentives to treat “research only” drugs as equivalent to FDA-approved medications. This blurring of regulatory categories can be viewed as corporate interference in medical ethics, a growing focus for courts and regulators. Here, CPOM violations implicate not only prescribing standards but also human subject research requirements. If a telehealth company lacks IRB approval or research protocols, it effectively assumes a role reserved for licensed physicians and researchers, deepening CPOM exposure.

Further, if MSO payments are tied to referral volume or value, the Anti-Kickback Statute and Stark Law may apply. Platforms billing insurers or federal programs risk False Claims Act liability for services delivered through non-compliant structures. At the same time, deceptive marketing can trigger enforcement by the FTC and state consumer protection agencies. These trends echo past crackdowns on online pain-management clinics, where ownership and control questions often opened the door to broader privacy, fraud, and advertising investigations.

Compliance Guidance

Telehealth companies, health systems, providers, and investors should consider these principles:

• Maintain Clinical Independence: Physicians must retain authority over decisions, protocols, and personnel.
• Use Fair Market Value Fees: Avoid revenue-based compensation.
• Delineate Roles: Agreements should limit MSOs to non-clinical support. Conduct periodic compliance audits.
• Perform Multi-State Analysis: Confirm state-specific CPOM rules.
• Audit Marketing and Operations: Review advertising claims, telehealth workflows, and consent processes.

Even established health systems partnering with digital providers should confirm compliance, as liability can extend to parties involved.

A Doctrine Under Pressure

The CPOM doctrine has long served as a safeguard against commercial interference in healthcare. Yet today’s telehealth marketplace, where care is delivered via apps, across state lines, and at venture-backed scale, is testing its limits. Enforcement is shifting from ownership to control, with regulators asking a simple question: Who truly makes the medical decisions? In the digital health era, compliance need not be sacrificed for innovation. Patient safety and integrity should remain at the center of progress.