A newly introduced federal bill could significantly change who is allowed to own a medical practice—and who gets to control everything from billing and staffing to physician compensation and payer contracts.

The Stop Corporate Takeovers of Physicians Act, introduced in Congress on September 16, 2026, would establish federal restrictions on the corporate practice of medicine. The proposal targets private equity firms, insurance companies and other for-profit corporations that own or exercise control over physician practices.

The bill has only been introduced, which means these proposed requirements are not currently federal law. But if your practice has an outside investor, Management Services Organization (MSO), private-equity relationship or other corporate ownership structure, you should understand what lawmakers are proposing—and which parts of your current arrangements could be affected if legislation like this becomes law.

Why Congress Is Targeting Corporate Control of Medical Practices

Corporate ownership and employment of physicians have increased significantly.

According to the bill’s sponsors, more than 80% of U.S. physicians are now employed by corporate entities, including private equity-backed organizations and insurers, compared with 62% in 2019. The sponsors argue that existing state corporate-practice-of-medicine laws have not prevented companies from using alternative ownership and management structures to exercise control over medical practices.

Currently, corporate practice of medicine requirements largely depend on state law. According to the bill’s sponsors, more than 30 states prohibit the corporate practice of medicine in some form, although the scope and enforcement of those restrictions vary by state. For additional background on how these laws work, review the American Bar Association’s overview of corporate practice of medicine and fee-splitting restrictions.

The proposed federal legislation is modeled in part on Oregon Senate Bill 951, which established restrictions intended to separate ownership and control of medical practices from management organizations. The Oregon Medical Association’s Corporate Practice of Medicine FAQs provide a useful explanation of the state’s requirements and their impact on MSO relationships.

For your practice, the important issue isn’t simply who technically owns the medical entity. You also need to understand who actually controls the decisions that affect the practice.

Your MSO Agreement Could Receive Much More Scrutiny

One of the most important parts of the proposed legislation involves Management Services Organizations.

MSOs can provide legitimate administrative support to physician practices, including revenue cycle management, staffing support and other business functions. The concern addressed by the proposed legislation is whether an MSO’s authority becomes so extensive that the management company effectively controls a physician-owned practice.

The bill specifically targets arrangements sometimes called “friendly physician” or “captive physician” models. In these arrangements, a physician may technically own the professional practice while an outside organization controls significant business or operational functions through contractual agreements.

This issue isn’t merely theoretical. Recent litigation has examined how much authority a corporate organization can exercise over a nominally physician-owned practice. The American Medical Association’s discussion of a California private-equity case provides a real-world example of the tension between corporate management authority and physician control.

If your practice uses an MSO, don’t look only at the name on the ownership documents. Look closely at the actual authority granted by your agreements.

Know Which Decisions Your MSO Controls

Under the proposed legislation, an MSO could not exercise prohibited control over a physician practice through a friendly or captive physician or by taking over specified business, administrative and clinical functions.

Those functions include areas such as:

• Hiring and firing
• Employee work schedules
• Physician and staff compensation
• Disbursement of practice revenue
• Revenue targets
• Billing practices
• Contracting
• Other operational services that could effectively transfer control of the practice

This distinction is particularly important for your administrative team. Decisions that may appear purely operational—such as productivity requirements, billing policies, scheduling rules or compensation formulas—can affect how physicians deliver care.

That means your compliance review shouldn’t stop with clinical policies. Your business agreements and administrative workflows may be just as important.

Physician Owners Would Need a Real Connection to the Practice

The bill also attempts to prevent corporations from satisfying physician-ownership requirements by installing a physician owner who has little meaningful involvement with the practice.

Under the proposal, physician owners would have to be meaningfully engaged in providing medical care in the state where the practice operates. Details of this and other proposed ownership restrictions are included in the congressional summary of the legislation.

That provision could be particularly important if your organization operates across multiple states or relies on ownership arrangements involving physicians who live or primarily practice elsewhere.

You should know who legally owns each professional entity in your organization, where those physicians practice and what role they actually play in patient care and practice governance.

Physician Employment Agreements Could Also Be Affected

Ownership isn’t the only issue addressed by the bill.

The Stop Corporate Takeovers of Physicians Act would also prohibit certain restrictive contract provisions affecting physicians, including:

• Non-compete agreements
• Nondisclosure agreements
• Non-disparagement agreements

The stated goal is to protect physician independence and prevent contractual provisions from restricting physicians’ ability to leave corporate organizations or discuss practice conditions. You can review these provisions in the House sponsors’ description of the legislation.

If the legislation advances, your practice may need to evaluate physician employment agreements in addition to ownership and MSO contracts.

That does not mean you should immediately remove provisions from existing agreements based solely on the introduction of this bill. Instead, make sure you know which contracts contain these provisions so your legal counsel can evaluate them against applicable state law now and any future federal requirements.

State Corporate Practice of Medicine Laws Still Matter

One of the biggest mistakes your practice could make is waiting for Congress before looking at corporate-practice-of-medicine requirements.

The federal proposal does not erase the importance of existing state law. Your practice must continue complying with the ownership, licensing, fee-splitting and professional-control requirements that currently apply in every state where you operate.

The federal bill draws from Oregon’s recent approach, but corporate-practice-of-medicine requirements already vary considerably from one jurisdiction to another. This is especially important for multi-state organizations. An ownership or MSO structure that works in one state should not automatically be assumed to comply in another.

What Your Medical Practice Should Do Now

Because the Stop Corporate Takeovers of Physicians Act is proposed legislation—not current federal law—you don’t need to restructure your practice simply because the bill was introduced. You can, however, use the proposal as a reason to better understand how authority is currently divided within your organization.

Start by reviewing your MSO and management agreements. Identify exactly who has authority over billing, revenue distribution, payer contracting, compensation, staffing, scheduling and other major operational decisions.

Next, review your ownership structure. Confirm that your practice complies with the corporate-practice-of-medicine requirements in every state where you operate and document the role your physician owners actually perform.

Finally, inventory physician employment agreements containing non-compete, nondisclosure or non-disparagement provisions. State requirements affecting these provisions may already apply, regardless of what happens to the federal proposal.

The goal isn’t to predict whether Congress will pass the bill. It’s to know how your practice is structured today so you can respond quickly if federal or state requirements change.

Stay Ahead of Medical Practice Compliance Changes Keeping up with new legislation, payer rules, billing requirements, HIPAA, coding changes and other compliance obligations is difficult when you’re also responsible for running a medical practice. With Healthcare Training Leader’s Annual All-Access Pass, your entire team gets access to practical, expert-led live and on-demand masterclasses designed specifically for physician practices. Instead of scrambling to understand each new rule after it takes effect, give your team the expertise they need to recognize risks, avoid costly mistakes and know what to do when requirements change.

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