Stop Corporate Takeovers of Physicians Act of 2026
By Megan Neel, Shareholder, FBFK Law
On September 16, 2026, Senators Elizabeth Warren, Ron Wyden, and Jeff Merkley, joined by Representatives Val Hoyle, Alexandria Ocasio-Cortez, and Suhas Subramanyam, introduced the Stop Corporate Takeovers of Physicians Act of 2026. A bill number has not yet been assigned, but the bill’s ambition is plain: a nationwide ban on the corporate practice of medicine, enforced by the Federal Trade Commission, state attorneys general, and physicians themselves.
The bill is modeled on Oregon Senate Bill 951, the 2025 law that, in practice, has closed Oregon to the conventional private equity platform model. If Congress follows Oregon’s lead, the management services organization structure behind most investor-backed physician practices would become unlawful in every state, including the roughly twenty states that have never restricted ownership of medical practices.
What the Bill Would Prohibit
The core provision makes it unlawful for any partnership or corporate entity that is not majority-owned and controlled by licensed healthcare practitioners to own or control a medical practice, to employ or contract for a licensee’s professional services, or to engage in the practice of medicine. “Majority-owned and controlled” requires both a majority of the ownership interests and a majority of the governing body. Nonprofit and public providers, hospitals, and hospital-affiliated clinics are exempt from the ownership ban.
The bill then targets the “friendly physician” model directly. A management services organization and its owners, employees, or affiliates could not own shares in a practice, serve as its director or officer, control or restrict the transfer of its shares or assets, or advertise its services under any name other than the practice’s own. Nor could an MSO exercise “de facto control” over a practice’s administrative, business, or clinical operations, which includes tasks such as: hiring and firing of personnel; scheduling and compensation of licensed providers; setting staffing levels; creating the chargemaster; and determining revenue distribution and targets. Management agreements would be valid only if negotiated at arm’s length through counsel and advisors selected by the practice without MSO involvement, and only if the compensation reflects fair market value as determined by the FTC.
Physician owners would have to be licensed and physically present in the state where the practice treats patients and “substantially engaged” in delivering care, ending the model in which a single physician nominally owns professional entities across many states.
Clinician Protections That Reach Hospitals
The bill’s clinician protections sweep more broadly than its ownership ban. Non-compete clauses and non-disclosure or non-disparagement agreements between licensees and any healthcare provider or MSO would be void, with a single exception for non-competes binding physicians who own at least 25 percent of their practice. No healthcare provider could interfere with a licensee’s clinical judgment through discipline, retaliation, or “excessive pressure,” including by dictating time spent with patients, admission or observation status, discharge referrals, or diagnosis codes. Because the hospital exemption applies only to the ownership prohibition, hospitals and health systems would be bound by these provisions.
Enforcement With Teeth
The bill supplies three enforcement paths. The FTC would treat violations as violations of a trade regulation rule, unlocking civil penalties and extending its reach to nonprofits. State attorneys general could sue as parens patriae. Any injured person could bring a private action for treble damages and attorneys’ fees. On a finding of violation, a court would be required to order divestiture and disgorgement of revenue received during the violation period, and violators could potentially be excluded from Medicare and Medicaid. The requirements would take effect one year after enactment, and the bill expressly preserves state laws that are equally or more stringent.
The Oregon Precedent
Oregon enacted SB 951 in June 2025 with bipartisan majorities. Its MSO restrictions took effect January 1, 2026 for newly formed entities and reach pre-existing arrangements on January 1, 2029. Unlike the federal proposal, Oregon’s law is enforced solely through a private right of action. When PeaceHealth moved this year to replace its Eugene-area independent emergency physician group with an out-of-state staffing company operating through a newly formed Oregon entity, the physicians sued under SB 951. In May, midway through a federal court hearing, PeaceHealth reversed course and renewed the group’s contract, and the case was dismissed. The bill’s sponsors cite that episode as proof of concept.
Why the States Without a Doctrine Matter Most
About thirty-three states restrict the corporate practice of medicine in some form, with Texas and California among the most restrictive. Roughly seventeen to twenty states, including Florida, Missouri, Oklahoma, Utah, and Virginia, impose no meaningful restriction at all, and investor-backed platforms operating there have never needed a friendly-physician structure. A federal statute would erase that distinction overnight and force restructuring or divestiture of directly owned practices. Even in states with strong doctrines, the bill goes further than existing law by requiring in-state, practicing owners, subjecting management fees to a federal fair market value standard, and adding treble damages.
Outlook and Next Steps
The sponsors are all Democrats in a Republican-controlled Congress, and passage this session is far from assured. However, the direction of travel is unmistakable. Oregon’s law is in force, California has barred private equity and hedge fund interference with physician and dental practices since January 1, 2026, Vermont enacted similar restrictions in June, and Massachusetts, Indiana, Maine, Washington, and Illinois have expanded review of investor-backed healthcare transactions. Other states have proposed similar legislation targeting transactions in the healthcare industry, although not all have passed.
Investors, MSOs, lenders, and physician groups should now audit management agreements for indicia of de facto control, confirm that professional entity owners are licensed, present, and practicing in each state, revisit non-compete and non-disparagement provisions, and model a forced divestiture. FBFK’s Health Law practice is monitoring the bill and will provide updates as it receives a number and moves through committee.