Bottom Line Up Front: The Stop Corporate Takeovers of Physicians Act would create federal restrictions on physician practice ownership and MSO control in an area historically governed primarily by state law. The bill would also address physician non-competes, employment protections, and control over practice operations.
Stop Corporate Takeovers of Physicians Act: What Physicians Should Know
For decades, the corporate practice of medicine has largely been a matter of state law. That could change under a new bill introduced into Congress earlier this month.
The Stop Corporate Takeovers of Physicians Act of 2026 would establish federal restrictions on the ownership and control of medical practices and impose significant limitations on the role of management services organizations (“MSOs”). If enacted, the legislation would represent a significant shift in an area of healthcare law that has traditionally been governed primarily at the state level.
The Corporate Practice of Medicine Today
The corporate practice of medicine, commonly referred to as “CPOM,” generally describes restrictions intended to prevent non-physicians and other unlicensed entities from owning medical practices or exercising control over physicians’ clinical judgment.
There is currently no single nationwide CPOM standard. Instead, the rules depend heavily on state law.
Some states impose relatively strict restrictions on who may own a medical practice or employ physicians. Other states permit broader corporate involvement. Even among states that recognize some form of the CPOM doctrine, the source and scope of the restrictions can differ significantly. Depending on the state, the applicable rules may arise from statutes, professional licensing laws, court decisions, attorney general opinions, or guidance from licensing boards.
The exceptions vary as well. Hospitals, nonprofit organizations, professional entities, and other healthcare organizations may receive different treatment depending on the jurisdiction.
As a result, healthcare organizations operating across multiple states often encounter very different ownership and management rules from one state to another.
MSOs have also become an important part of this landscape. Under a common structure, a physician-owned professional entity provides the medical services while a separate MSO provides administrative and business services pursuant to a management services agreement. Those services may include billing and collections, human resources, information technology, marketing, scheduling, facilities, and other non-clinical functions.
The distinction between permissible administrative support and impermissible control over a medical practice is already an important issue under the laws of a number of states.
The proposed federal legislation would bring that issue to the national level.
What Would the Stop Corporate Takeovers of Physicians Act Do?
Introduced on September 16, 2026, the Stop Corporate Takeovers of Physicians Act would establish a federal prohibition on certain forms of corporate ownership and control of medical practices.
At its core, the bill would generally prohibit an entity that is not majority-owned and controlled by licensed healthcare professionals from owning or controlling a medical practice, employing or contracting for the professional services of a licensee, or engaging in the practice of medicine. The bill contains exceptions for certain entities, including nonprofit and public healthcare providers, hospitals, hospital-affiliated clinics, critical access hospitals, and rural emergency hospitals.
But the legislation goes considerably further than ownership.
The bill specifically targets the relationship between medical practices and MSOs. Among other restrictions, an MSO generally could not exercise ultimate decision-making authority over matters such as:
- hiring and termination of practice employees;
- physician work schedules and compensation;
- staffing levels;
- the amount of time physicians spend with patients;
- revenue disbursement;
- revenue targets and physician incentives;
- diagnostic coding;
- clinical standards and policies;
- billing policies and pricing; and
- third-party payer contracting.
The legislation would also restrict an MSO’s ability to control transfers of ownership interests in a medical practice, finance acquisitions of practice ownership, participate in managing the practice, or advertise medical services under a name other than the medical practice itself.
Management agreements would be subject to additional requirements as well. The bill would require, among other things, that a medical practice negotiate its management agreement at arm’s length using independently selected advisors and that MSO compensation reflect fair market value.
In other words, the legislation is not directed solely at who technically owns a medical practice. It is also directed at who actually controls the practice after the transaction is complete.
How Would the Act Affect Physician Employment Agreements?
Another notable feature of the legislation is that its impact would extend beyond healthcare transactions and MSO structures.
The bill would generally prohibit non-compete clauses involving covered licensees, subject to an exception for a licensee who owns at least 25 percent of the medical practice. It would also prohibit certain non-disclosure and non-disparagement agreements.
The bill separately prohibits healthcare providers from interfering with or directing a licensee’s professional judgment or clinical decisions through discipline, threats, adverse employment actions, coercion, retaliation, or excessive pressure.
These provisions make the legislation potentially relevant not only to investors and healthcare organizations, but also to physicians reviewing employment agreements and considering the degree of control their employer may exercise over their practice.
A Federal Floor for Corporate Practice of Medicine
Importantly, the legislation would not simply replace the existing state-by-state system.
The bill expressly preserves state laws that impose equal or more stringent ownership and control requirements, provide equal or greater protections to licensed professionals, or impose equal or more stringent restrictions on MSOs.
The practical result would therefore be a federal floor for the corporate practice of medicine, with states remaining free to impose stricter requirements.
That would be a significant departure from the current regulatory landscape. Healthcare organizations would still need to analyze state CPOM laws, but they would also have a federal set of ownership, control, contracting, and employment restrictions to consider.
How Would the Act Be Enforced?
The enforcement provisions are also significant.
The Federal Trade Commission would be authorized to enforce the law. State attorneys general would also have enforcement authority, and the bill would create a private right of action for persons injured by a violation.
A prevailing private plaintiff could potentially recover treble damages, attorneys’ fees, litigation costs, and equitable or declaratory relief. Courts could also order divestiture and disgorgement in appropriate cases.
The bill would additionally permit exclusion from federal healthcare programs for entities that violate its MSO restrictions.
If enacted, the requirements would generally take effect one year after enactment.
What Happens Next?
For now, the Stop Corporate Takeovers of Physicians Act remains proposed legislation.
The House version, H.R. 10444, was introduced on September 16, 2026 and referred to the House Committee on Energy and Commerce and the Committee on Ways and Means. The legislation may be amended substantially as it moves through the legislative process, and there is no guarantee that it will ultimately become law.
Nevertheless, the proposal is worth watching.
States have already been taking a closer look at corporate involvement in physician practices, including ownership structures, private equity investment, MSO arrangements, and the degree of control retained by physicians. The Stop Corporate Takeovers of Physicians Act would take that discussion a significant step further by creating federal rules in an area historically governed largely by the states.
For physician practices, MSOs, investors, and physicians themselves, the important question may increasingly be not simply who owns the medical practice on paper, but who actually controls it in practice.
We will continue monitoring the legislation and provide updates as it moves through Congress.
Frequently Asked Questions
What is the Stop Corporate Takeovers of Physicians Act?
The Stop Corporate Takeovers of Physicians Act of 2026 is proposed federal legislation that would restrict certain forms of corporate ownership and control of medical practices and impose requirements on management services organizations.
Would the Act prohibit private equity investment in physician practices?
The legislation would significantly restrict certain ownership and control structures involving entities that are not majority owned and controlled by licensed healthcare professionals. Its application would depend on the particular ownership and management structure involved.
Would the Act eliminate state corporate practice of medicine laws?
No. The legislation would preserve state laws that impose equal or more stringent ownership and control requirements or provide greater protections to licensed professionals.
Would the Act affect physician non-competes?
Possibly. The legislation would generally prohibit non-compete agreements involving covered licensed professionals, subject to an exception for certain professionals who own at least 25 percent of the medical practice.
Is the Stop Corporate Takeovers of Physicians Act currently law?
No. It is proposed federal legislation and would need to proceed through the legislative process before becoming law.
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