Federal Bill Targets Corporate Influence in Health Care and PC-MSO Structures
On September 16, the Stop Corporate Takeovers of Physicians Act was introduced by Sens. Elizabeth Warren, Ron Wyden, and Jeff Merkley, along with Reps. Val Hoyle, Suhas Subramanyam, and Alexandria Ocasio-Cortez. The legislation largely mirrors Oregon’s SB 951, which took effect earlier this year, and comes amid growing state and federal efforts to address corporate involvement in health care, including increased scrutiny of physician practice management and PC-MSO arrangements in California.
Key Provisions of the proposed federal legislation include:
- Prohibition on private equity firms, insurers, and other for-profit corporations from owning or controlling medical practices.
- Closing the longstanding “friendly physician” model by restricting MSO arrangements that effectively allow investors to control physician practices despite state CPOM prohibitions.
- Bans on MSOs exercising control over core business, operational, and clinical functions, including hiring and firing decisions, physician compensation, scheduling, revenue targets, contracting, and billing practices.
- Physician owners must be licensed and actively engaged in the delivery of care within the state where the practice operates.
- Physician must retain authority over clinical judgement and a prohibition on contractual provisions, including non-compete, non-disclosure, and non-disparagement agreements are banned.
For health care investors, MSOs, physician groups, and health systems, the legislation is another signal that scrutiny of management and ownership structures is likely to intensify. Although prior efforts to implement similar legislation in the states have failed, this bill may cause more states may look to reintroduce similar legislation in 2027 legislative sessions.
For a deeper analysis of the proposal and its practical implications for providers and MSOs, see the HLB Digital Health Team’s article, Federal Bill Seeks to Outlaw the Friendly PC/MSO Model Nationwide, but State Enforcement Is the Real Near-Term Risk.
