On September 16, 2026, Democratic Senators Elizabeth Warren (D-MA), Ron Wyden (D-OR) and Jeff Merkley (D-OR), along with Representatives Val Hoyle (D-OR), Alexandria Ocasio-Cortez (D-NY) and Suhas Subramanyam (D-VA), introduced the Stop Corporate Takeovers of Physicians Act of 2026 (the “Act”) to establish a federal framework governing the corporate practice of medicine (“CPOM”), an area of law that has historically been regulated almost exclusively at the state level.
Modeled, at least in part, on Oregon’s recent CPOM legislation, the Act is intended to limit the ability of private equity firms, insurers and other for-profit non-clinician entities to own, control or influence physician practices and clinical decision-making, while generally exempting certain nonprofit health care providers and hospitals from several of its central restrictions. Supporters of the Act contend that management services organization (“MSO”) arrangements and similar structures have allowed corporate entities to exert increasing influence over physician practices, effectively circumventing longstanding CPOM restrictions in many states.
If enacted, this would significantly expand federal oversight of physician practice ownership and management arrangements. However, health care organizations should keep the current legislative landscape in perspective. The Act was introduced late in this congressional session and will expire at the end of the year. It also currently lacks bipartisan support and does not have sponsorship from members of the committee in which it was referred. Given the unlikelihood of advancement this year, most providers, physician groups, investors and MSOs are unlikely to need to make immediate operational changes in response to the Act’s introduction. Nevertheless, the proposal reflects continued scrutiny of physician-practice ownership, MSO arrangements and physician autonomy issues that remain active areas of public policy discussion. Recent state initiatives reflect similar scrutiny, including California Senate Bill 351 and Assembly Bill 1415, effective January 1, 2026, which impose additional restrictions and requirements on certain physician-practice, management and health care transaction arrangements.
Key Provisions of the Act
Ownership and Control Restrictions. At its core, the Act would prohibit certain corporate ownership and control of medical practices. Under the Act, a for-profit partnership or corporate entity that is not majority-owned and controlled by one or more licensed clinicians generally could not:
- Own or control a medical practice;
- Employ or contract for the professional services of licensed clinicians; or
- Otherwise engage in the practice of medicine.
For purposes of the legislation, licensed clinicians include physicians, nurse practitioners and physician assistants. The Act generally requires both majority ownership and majority governing-body control by licensed clinicians.
It would establish a national baseline that would extend CPOM restrictions to states that do not currently impose them, while also allowing states to maintain more restrictive CPOM requirements. As a result, states with existing CPOM laws would generally retain their current authority to impose stricter ownership and control limitations.
Restrictions on MSOs. The Act also takes direct aim at “friendly physician” MSO arrangements. The Act would prohibit MSOs from exercising control over a variety of operational, administrative and clinical functions of a physician practice. Among other things, an MSO could not exercise ultimate decision-making authority over:
- Hiring and termination decisions;
- Clinician compensation and work schedules;
- Staffing levels;
- Revenue distribution and financial targets;
- Billing and coding practices;
- Clinical standards and policies; and
- Third-party payor contracting activities.
The Act would further restrict an MSO’s ability to own interests in, finance acquisitions of or otherwise participate in the governance and management of physician practices. In addition, management services agreements would be subject to arm’s-length negotiation requirements and fair market value standards.
Clinical Independence Protections. Consistent with its stated purpose, several provisions are designed to protect physician autonomy and clinical decision-making. The Act would prohibit medical practices and other entities engaged in the provision of health care services from interfering with, controlling or directing a clinician’s professional judgment through discipline, adverse employment actions, coercion or other forms of pressure. The Act specifically identifies concerns regarding patient scheduling, treatment decisions, coding practices and other clinical matters that lawmakers believe should remain under the control of licensed clinicians.
Physician Ownership Requirements. It seeks to ensure that physician ownership is substantive rather than merely nominal. Under the proposal, clinician owners generally would be required to:
- Be licensed in the state where services are provided; and
- Be substantially engaged in delivering medical care.
This requirement appears intended to address concerns regarding physician owners who serve primarily as nominal owners for multi-state practice structures or investor-backed arrangements.
Restrictions on Certain Employment Covenants. The Act would prohibit a variety of restrictive contractual provisions involving clinicians, health care providers and MSOs. Among other things, the Act would generally render non-compete, non-disclosure and non-disparagement agreements unenforceable, subject to limited exceptions. One notable exception would permit certain non-compete provisions where a clinician maintains an ownership interest of at least 25% in the medical practice.
Enforcement Mechanisms. There are substantial enforcement provisions. Violations would be treated as unfair or deceptive acts or practices enforceable by the Federal Trade Commission. The Act would also:
- Create a private right of action;
- Permit recovery of treble damages, attorneys’ fees and costs;
- Authorize enforcement actions by state attorneys general;
- Allow courts to order divestiture and disgorgement in certain circumstances; and
- Create potential exclusion consequences under federal health care programs.
Why the Legislative Effort Is Significant
The most notable aspect of the Act may be its attempt to establish a federal CPOM framework. Historically, CPOM restrictions have developed through a patchwork of state statutes, regulations, licensing requirements, attorney general opinions and court decisions. As a result, health care organizations often evaluate physician-practice arrangements under state-specific standards that can vary significantly from one jurisdiction to another. This represents a departure from that traditional approach by creating a nationwide set of ownership, governance and operational requirements. Although many of the Act’s concepts resemble restrictions already seen in states such as Oregon and California, the proposal would apply those concepts at the federal level.
At the same time, the exemptions are notable. The Act generally exempts nonprofit health care providers, hospitals, hospital-affiliated clinics, critical access hospitals and rural emergency hospitals from several of its central ownership restrictions. As a result, the practical impact of the Act would likely be felt most directly by investor-backed physician practice platforms, MSOs and similar arrangements rather than many traditional hospital and health system structures.
Practical Takeaways
Hall Render recommends that health care organizations consider the following:
- Understand the Act’s current status. While the proposal has generated significant attention, it faces substantial hurdles before becoming law. Little time is left in the current Congress, especially in light of the midterm elections; thus, legislative time for the Act to move through the process is limited. Additionally, there is not enough bipartisan support for this to be fast-tracked through Congress.
- Continue monitoring CPOM developments. Physician-practice ownership, clinical autonomy and MSO arrangements continue to receive increased attention from lawmakers, regulators and enforcement agencies. Concepts found in the Act will be discussed by both parties, especially as Congressional health care committees continue their scrutiny of health care consolidation, transparency and ownership.
- Review existing MSO and physician-practice structures as part of routine compliance efforts. Organizations should remain mindful of applicable state CPOM requirements, particularly in states that have recently expanded restrictions on physician-practice ownership and management arrangements.
- Consider flexibility in new MSO arrangements. Organizations entering into new MSO or physician-practice arrangements may wish to consider whether their agreements provide appropriate flexibility to restructure or unwind the arrangement if future federal or state CPOM restrictions materially affect the structure. Given the current legislative landscape, such provisions may be appropriate as a forward-looking risk-management consideration rather than as a response to the legislation itself.
- Watch for state-level activity. States continue to be very active in this space as many of the concepts reflected here have already appeared in recent state legislative and regulatory initiatives.
- Keep developments in perspective. At this stage, most health care organizations are unlikely to need immediate operational or transactional changes solely because the Act was introduced. However, the Act serves as another reminder that physician-practice ownership and governance structures remain under scrutiny at both the state and federal levels.
Hall Render will continue to monitor developments involving the Act and related CPOM initiatives.
