September 24, 2026 by matray

Federal legislation introduced this month would establish nationwide restrictions on corporate ownership and control of medical practices while limiting the authority of management services organizations and strengthening protections for physicians and other licensed healthcare professionals. 

The Stop Corporate Takeovers of Physicians Act of 2026 would generally prohibit a partnership or corporate entity from owning or controlling a medical practice, employing or contracting for the professional services of a licensed healthcare professional, or practicing medicine unless the entity is majority owned and controlled by licensed professionals. 

The legislation was introduced Sept. 16 in both chambers of Congress. Sens. Elizabeth Warren, Ron Wyden and Jeff Merkley introduced S. 5419, which was referred to the Senate Committee on Commerce, Science & Transportation. Reps. Val Hoyle, Suhas Subramanyam and Alexandria Ocasio-Cortez introduced the House version, H.R. 10444, which was referred to the House Energy & Commerce and Ways & Means committees. 

The bill targets arrangements in which corporations, private equity firms, insurers and other organizations exercise control over physician practices through management services organizations, or MSOs, even when physicians technically retain ownership. 

Under the legislation, an MSO generally could not own shares in a medical practice, finance the acquisition of ownership interests or exercise control over the transfer or disposition of those interests. The legislation also would restrict MSOs from controlling practice operations through management agreements or other arrangements. 

Among the decisions that would remain under the control of the medical practice are hiring and firing, compensation, work schedules, staffing levels, the amount of time clinicians spend with patients, disbursement of practice revenue, revenue targets, billing and coding practices, prices and payer contracting. 

Physician owners also would have to be licensed and present in a state where the practice provides medical care and be substantially engaged in delivering medical care. The provision addresses arrangements described by the bill's sponsors as the “friendly physician” model, in which a physician holds formal ownership while an outside organization exercises significant control over the practice. The sponsors say the legislation is intended to close that loophole. 

The legislation also would prohibit healthcare providers from interfering with the professional judgment of employed or contracted clinicians through retaliation, adverse employment actions, coercion or other means. 

It specifically addresses interference involving decisions such as the amount of time spent with patients, admission or observation status, timing of treatment, referrals and diagnoses. 

The bill also would generally prohibit noncompete agreements involving licensed healthcare professionals, along with nondisclosure and nondisparagement agreements restricting them from disclosing information about their employment or working conditions. The legislation provides an exception to the noncompete prohibition for a licensee who owns at least 25% of a medical practice. 

“Patients want to know that decisions about their health are being made by their doctors, not by Wall Street investors,” Warren said. “If we’re going to lower costs and un-rig the health care system, we need to stop the corporate takeover of medicine.” 

The legislation includes exceptions to its corporate-practice prohibition for certain organizations, including nonprofit and public healthcare providers, hospitals and hospital-affiliated clinics, critical access hospitals and rural emergency hospitals. 

The bill also would preserve state laws that impose equal or more stringent requirements on medical-practice ownership and control, provide equal or greater protections to licensed healthcare professionals or impose equal or more stringent restrictions on MSOs. 

The proposal includes several enforcement mechanisms. Violations could be enforced by the Federal Trade Commission, state attorneys general or individuals harmed by violations. Private plaintiffs could seek damages, including treble damages, as well as attorneys' fees. 

Courts finding violations would be required to order violators to cease the prohibited conduct and, when applicable, require divestment and disgorgement of revenue received during the period of the violation. Either party could request a jury trial. Entities violating the legislation's requirements also could face exclusion from federal healthcare programs. 

The bill would take effect one year after enactment. 

Supporters say the legislation responds to the growing employment of physicians by corporate organizations. The sponsors cited research indicating that more than 80% of U.S. physicians are employed by corporate entities, including private equity firms and insurers, compared with 62% in 2019. They also contend that MSO arrangements have allowed corporate organizations to circumvent corporate-practice-of-medicine restrictions already in effect in many states. 

“Across the country, private equity firms and corporate conglomerates are buying up American physician offices. To increase shareholder profits, these entities often cut corners, leading to patients paying more for significantly worse care,” Ocasio-Cortez said. “I’m proud to co-lead the Stop Corporate Takeovers of Physicians Act to get Wall Street out of Americans’ doctors’ offices and ban predatory noncompete agreements for healthcare workers.” 

The legislation is modeled on an Oregon law restricting the corporate practice of medicine. 

The legislation has been endorsed by organizations including the American Academy of Emergency Medicine, American Economic Liberties Project, Coalition for Patient-Centered Care, Association for Independent Medicine, Alliance of Independent Dentists and Private Equity Stakeholder Project.