Stop Corporate Takeovers of Physicians Act of 2026
- Sponsor
- Rep. Hoyle, Val T. [D-OR-4]
- Committees
- Ways and Means Committee (primary)
- Last action
- Sep 16, 2026
Bottom line
This bill aims to fundamentally restructure the healthcare industry by limiting corporate ownership and influence over medical practices and clinical decisions, thereby empowering licensed professionals and altering the landscape of healthcare delivery and employment.
What it actually does
This bill prohibits the corporate practice of medicine by requiring medical practices to be majority-owned and controlled by licensed healthcare professionals, with exceptions for non-profit and hospital entities. It bans non-compete and non-disclosure clauses for licensees (with a limited exception for non-competes involving significant ownership) and imposes extensive restrictions on management services organizations (MSOs) to prevent them from controlling medical practice operations or clinical decisions. The bill also establishes robust federal and state enforcement mechanisms, including a private right of action and potential exclusion from federal health programs for MSO violations.
Proponents argue
Supporters argue that the bill protects patient care by removing corporate profit motives from clinical decisions, empowers physicians and other licensed professionals, and fosters competition by banning restrictive employment clauses. They contend it addresses concerns about healthcare consolidation leading to higher costs, reduced quality, and the erosion of professional autonomy.
Opponents contend
Opponents might argue that the bill could disrupt existing healthcare delivery models, limit essential capital investment in medical practices, and potentially reduce efficiency or access to care, especially in underserved areas where corporate entities often provide necessary infrastructure and administrative support. They may also contend that the restrictions on MSOs are overly broad and could stifle innovation in healthcare management.
The bill is moderately complex due to its detailed legal definitions, exceptions, and extensive prohibitions, requiring a dedicated read to understand its full implications for various stakeholders in the healthcare industry.
Section 2(a)
Prohibition on Corporate Ownership of Medical Practices
This provision makes it unlawful for any partnership or corporate entity not majority-owned and controlled by licensed healthcare professionals (licensees) to own or control a medical practice, employ licensees for professional services, or engage in the practice of medicine. 'Majority-owned and controlled' means licensees hold at least 50% ownership and constitute a majority of the governing body.
Supporters argue
Supporters argue this provision restores physician autonomy, ensures patient care is driven by medical ethics rather than corporate profit motives, and prevents consolidation that can lead to higher costs and reduced quality of care.
Critics contend
Critics might contend this restricts capital investment in healthcare, particularly in rural or underserved areas, potentially limiting access to modern facilities and technology. They may also argue it could lead to less efficient administrative structures.
Tradeoffs
This provision balances the goal of enhancing physician autonomy and patient-centric care against potential impacts on investment, administrative efficiency, and access to capital for practice expansion or modernization.
Section 2(a)(3)
Exemptions for Non-Profits and Hospitals
This provision explicitly exempts non-profit or public healthcare providers, as well as hospitals (including hospital-affiliated clinics, critical access hospitals, and rural emergency hospitals), from the prohibition on the corporate practice of medicine.
Section 2(b)(1)(A)
Ban on Restrictive Covenants for Licensees
This provision makes it unlawful for any licensee, healthcare provider, or management services organization to enter into non-compete clauses or non-disclosure/non-disparagement agreements with licensees. Any such agreements are declared void and unenforceable. An exception allows non-compete clauses if the licensee holds 25% or more ownership in the medical practice.
Section 2(b)(1)(B)
Protection of Licensee Clinical Autonomy
This provision prohibits healthcare providers from directly or indirectly interfering with, controlling, or directing the professional judgment or clinical decisions of a licensee. This includes specifying patient visit times, determining patient clinical status (e.g., admission, discharge referrals), dictating treatment initiation speed, controlling referrals, having final say over diagnoses/coding, or limiting clinical orders.
Section 2(b)(2)
Limitations on MSO Control over Medical Practices
This provision imposes extensive restrictions on MSOs, prohibiting them from controlling or restricting the sale/transfer of a medical practice's assets, issuing ownership interests in practices, paying dividends from practice shares, owning/controlling/managing a practice, acquiring practice ownership, or contracting for management services unless negotiated at arm's length at fair market value. MSOs are also forbidden from advertising under a non-practice name or exercising de facto control over administrative, business, or clinical operations that affect care quality, including hiring, schedules, compensation, staffing, patient visit times, revenue disbursement, diagnostic coding, clinical standards, billing policies, pricing, or third-party payer negotiations. Any agreements violating these restrictions are void.
Section 2(c)
Geographic Presence and Engagement for Licensee Owners
This provision requires that licensee owners of a medical practice must be licensed and physically present in a State where the medical practice furnishes services to patients, and they must be substantially engaged in delivering medical care.
Section 2(e)
Enforcement Mechanisms
This section outlines robust enforcement mechanisms. Violations are treated as unfair or deceptive acts under the FTC Act, granting the FTC broad powers, including jurisdiction over non-profits. It establishes a private right of action for injured persons to seek treble damages, attorney's fees, and other relief. State Attorneys General can also bring civil actions. Courts are mandated to issue cease and desist orders, require divestment, and disgorge revenues from violations. A right to jury trial is included for all actions.
Section 3
Exclusion from Federal Health Programs for MSO Violations
This section amends the Social Security Act to add violations of the MSO restrictions (Section 2) as a basis for mandatory exclusion from participation in Federal health care programs (e.g., Medicare, Medicaid).
This subsection defines what constitutes the 'practice of medicine' for the purposes of MSO restrictions. It includes services that affect the patient-licensee relationship, specifically by performing patient evaluations leading to diagnosis/treatment plans, and by imposing administrative or facility-based measurements or restrictions on any portion of the patient-licensee relationship.
Section 2(d)(4)(B)
Why it matters:While standard legislative practice to define terms, the detailed and expansive nature of this definition makes it a critical component that could be easily overlooked despite its broad impact.
Case for: Supporters argue this broad definition is necessary to prevent MSOs from circumventing the intent of the bill by indirectly influencing clinical decisions through administrative means, thereby protecting patient care.
Case against: Critics might argue this definition is overly broad and could inadvertently capture legitimate administrative functions that are not intended to interfere with clinical judgment, leading to confusion and over-regulation.
Estimated impact: This definition significantly expands the scope of MSO activities deemed unlawful, impacting their entire operational model and requiring substantial changes to how they interact with medical practices.
This clause grants the Federal Trade Commission (FTC) enforcement authority over non-profit organizations for violations of this Act, explicitly overriding typical jurisdictional limitations of the FTC.
Section 2(e)(1)(C)
Why it matters:While standard legislative practice for modifying agency jurisdiction, its impact is significant as it extends federal regulatory power into an area traditionally less scrutinized by the FTC.
Case for: Supporters argue this ensures comprehensive enforcement across the entire healthcare sector, as non-profits can also engage in practices that compromise physician autonomy or patient care, necessitating consistent oversight.
Case against: Critics might argue that non-profits have different motivations and governance structures than for-profit entities, and subjecting them to the same FTC scrutiny could be burdensome, inappropriate, or divert resources from their charitable missions.
Estimated impact: This provision significantly expands the FTC's regulatory reach into the non-profit healthcare sector, subjecting a large number of entities to new federal oversight and potential enforcement actions.
This section states that the Act does not preempt, displace, or supersede any State law that imposes equal or more stringent ownership/control requirements on medical practices, affords equal or greater protection to licensees, or imposes equal or more stringent restrictions on MSOs.
Section 4
Why it matters:Standard legislative practice for preemption clauses, but its 'floor' rather than 'ceiling' effect is important for understanding the interplay between federal and state law.
Case for: Supporters argue this preserves states' rights to enact stronger protections and regulations, allowing states to innovate or address local market conditions more effectively without being limited by federal law.
Case against: Critics might argue that a patchwork of varying state laws could create compliance complexities for national healthcare entities and MSOs operating across state lines, leading to inefficiencies and increased legal costs.
Estimated impact: This clause allows for potentially diverse regulatory landscapes across states, with some states maintaining or enacting stricter rules than the federal baseline, increasing compliance complexity for multi-state operators.