Laws that govern how fundamental healthcare services are provided vary significantly from state to state. Here are three major areas of healthcare law which vary by state.
1) Corporate Practice of Medicine (CPM) laws:
Approximately half of states in the U.S. have made it unlawful for practicing physicians to be employees of corporations. This ban on the corporate practice of medicine (CPM) is intended to keep medical professionals independent and free from financial pressures and influence.
Most states have made exceptions allowing physicians to become employees of not-for-profit organizations and sometimes hospitals. States such as California, Iowa, and Texas, have declined to allow hospitals to employ physicians, although even those states have special exceptions. Iowa hospitals may employ pathologists and radiologists, and Texas public hospitals and California teaching hospitals may employ physicians. Ohio has no ban on the corporate practice of medicine. Anyone can own a physician practice in Ohio.
2) Certificate of Need (CON) laws:
Certificate of Need (CON) was a federal requirement enacted as part of the Health Planning Resources Development Act of 1974. Though the federal law was repealed in 1987, state CON programs still restrict and govern the development and licensure of medical services in approximately 36 states. The original intent of these laws was to prevent any tendency to create overutilization of healthcare services by limiting the supply of healthcare provider facilities.
Nursing homes are the most commonly controlled healthcare service under state CON laws. Additionally, over one dozen states have enacted moratoriums (freezes) on the total number of nursing home beds in their respective state. In some states, nursing home bed licenses are regularly bought and sold between facilities as transferable assets.
Here are the latest counts of state CON programs for various services:
• 
Nursing home/LTC beds: 36 states and D.C.
• Hospitals: 28 states
• ASCs: 27 states
• Cardiac Cath: 26 states
• Open Heart Surgery: 25 states
• Rehabilitation: 25 states
• Neonatal Intensive Care: 23 states
• Radiation Therapy: 23 states
• Positron Emission Tomography: 20 states
• Substance/drug abuse: 19 states
• Magnetic resonance imaging (MRI): 18 states and D.C.
• Home Health, Hospice: 18 states
• Computed Tomography (CT): 13 states
3) Healthcare licensing laws:
Every state has its own licensing laws and standards for healthcare facilities, services, and professionals. State departments of health usually have a licensing division that processes new applications and renewals, performs site survey inspections, and revokes licenses when deemed appropriate.
State licensure, accreditation, and Medicare certification are separate credentials, yet they are sometimes related by state law. Some states require businesses to achieve accreditation (e.g., The Joint Commission, AAAHC) as a requirement for state licensure. Some states perform Medicare surveys on behalf of the federal government. To further complicate things, different versions of healthcare building life safety codes and AIA building guidelines are required for different state licensures, and those versions of the standards may differ from those required by accreditation organizations.
In one unique example, California has no state licensure requirement for ASCs that have partial or total physician ownership. So in California, all non-physician-owned ASCs pursue state licensure, while physician-owned ASCs must instead become accredited through an accreditation organization or become certified by Medicare to satisfy California’s requirements.
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