On September 16, 2026, Senators Elizabeth Warren, Ron Wyden, and Jeff Merkley, along with Representatives Val Hoyle, Alexandria Ocasio-Cortez, and Suhas Subramanyam, introduced the Stop Corporate Takeovers of Physicians Act of 2026. Modeled in part on Oregon's Senate Bill 951, as amended by House Bill 3410, the proposal would establish a nationwide corporate practice of medicine (CPOM) framework, significantly restrict management services organization (MSO) arrangements, and create federal, state, and private enforcement mechanisms.
The bill would not replace existing state CPOM laws. Instead, it would establish a federal baseline while preserving more restrictive state requirements. Organizations using “friendly” professional corporation (PC) structures, MSO arrangements, physician practice investments, or restrictive covenants should evaluate both the proposed federal standards and applicable state law.
The proposal combines requirements for majority licensee ownership and governance with restrictions intended to prevent MSOs from controlling a medical practice through contractual, management, or operational arrangements.
Key Provisions of the Proposed Legislation
Ownership and governance
Unless an exception applies, an entity that is not majority owned and controlled by licensed health professionals could not own or control a medical practice, employ or contract for professional services, or otherwise engage in the practice of medicine. Licensees would be required to collectively hold a majority ownership interest and make up a majority of the governing body. Licensee owners would need to be licensed in and present in the states where services are provided and substantially engaged in patient care.
Exemptions would include nonprofit and public providers, hospitals, hospital-affiliated clinics, critical access hospitals, and rural emergency hospitals.
Clinical independence and MSO restrictions
The bill would prohibit a health care provider from using discipline, retaliation, coercion, adverse employment actions, or excessive pressure to direct or interfere with a licensee’s professional judgment or clinical decisions. Protected decisions would include the amount of time a licensee spends with a patient; admission, observation, discharge, and palliative care decisions; treatment timing; referrals to alternative treatment settings and post-discharge providers; diagnoses and coding decisions; clinical orders; and the ownership, maintenance, or control of medical records in a manner that influences clinical decision-making.
Consistent with Oregon’s approach, the bill also targets MSO arrangements that confer effective control over a medical practice. If the bill were enacted, an MSO and its affiliates could continue to provide administrative and business services but could not own interests in the practice, serve in governance or management roles, control ownership transfers, issue or finance practice equity, receive ownership distributions, or otherwise control the practice’s operations or decision-making.
The bill would also prohibit MSOs from exercising de facto control by retaining ultimate decision-making authority over key administrative, financial, and clinical matters. These matters would include personnel decisions (such as hiring, termination, staffing levels, work schedules, compensation, and credentialing requirements), as well as the time a licensee may spend with a patient; the disbursement of practice revenue; revenue targets or provider incentives; diagnostic coding; clinical standards and policies; billing policies and pricing; and the negotiation, execution, performance, enforcement, or termination of payor and patient contracts.
Management agreements would be allowed only if they were negotiated at arm’s length through counsel and advisers selected by the practice without MSO involvement or financial conflicts of interest. Compensation would need to reflect fair market value as determined by the Federal Trade Commission (FTC). Any agreement conferring prohibited authority would be void and unenforceable.
Restrictive covenants
Noncompete clauses and nondisclosure or nondisparagement agreements involving a licensee, health care provider, or MSO generally would be void and unenforceable. A noncompete between a licensee and a medical practice would remain enforceable only if the licensee were a shareholder or member of the practice or otherwise owned or controlled at least 25% of its ownership or membership interests.
The bill would preserve otherwise available claims for libel, slander, tortious interference, and other independent torts.
Enforcement and effective date
The bill would provide several enforcement mechanisms. Violations would be treated as unfair or deceptive acts or practices under the FTC Act and could be enforced by the FTC.
Although nonprofit and public health care providers would be exempt from the ownership and control prohibitions, the bill expressly extends FTC enforcement authority to nonprofit organizations for other provisions, including those addressing noncompete, nondisclosure, and nondisparagement agreements, clinical independence, and applicable MSO restrictions.
The bill would also create a private right of action, allowing injured parties to seek treble damages, attorneys’ fees, litigation costs, and equitable or declaratory relief. State attorneys general could bring civil actions on behalf of state residents. Courts would be required to order violators to cease unlawful conduct and, when applicable, divest the affected entity and disgorge revenues received during the violation period.
The bill would take effect one year after enactment.
Comparing the Federal Proposal with Oregon’s CPOM Framework
The federal proposal draws heavily from Oregon’s recently enacted CPOM legislation but differs in several important respects.
- Ownership and control. Oregon’s restrictions focus primarily on limiting MSO control over professional medical entities. The federal proposal would go further by establishing a nationwide requirement that medical practices generally be majority owned and governed by licensed clinicians.
- Restrictive covenants. Both the federal proposal and Oregon law regulate noncompete, nondisclosure, and nondisparagement agreements involving clinicians. However, the scope of the restrictions and the available exceptions differ, including Oregon’s ownership-based and recruitment-investment exceptions for certain noncompete arrangements.
- Enforcement. The federal proposal would create significant new enforcement mechanisms, including FTC authority, a private right of action, enhanced monetary remedies, disgorgement and divestiture remedies for certain violations, and potential exclusion from federal health care programs. Oregon primarily relies on private civil enforcement.
- Exceptions and carveouts. The federal proposal includes specific exemptions for certain nonprofit and public providers, hospitals, hospital-affiliated clinics, critical access hospitals, and rural emergency hospitals. Oregon includes narrower exceptions for specified MSO ownership and governance structures, certain mental health practices, and qualifying hospital or health system arrangements.
- Implementation. The federal proposal would take effect one year after enactment. Oregon’s reforms are subject to phased implementation and grandfathering provisions, with certain MSO-related restrictions not applying to some preexisting arrangements until January 1, 2029.
Federal Preemption and State CPOM Laws
The bill would establish a federal minimum standard for CPOM regulation while preserving state laws that impose equal or more stringent ownership, control, and MSO restrictions, including laws that apply those requirements to entities exempt under the federal bill. It also would preserve state laws that provide equal or greater protections to licensees.
Oregon’s restrictions would remain effective to the extent they are at least as protective as the federal requirements. States could impose more stringent requirements but could not authorize conduct prohibited by the federal bill.
Organizations operating in multiple jurisdictions would need to comply with federal requirements and applicable state law, following the more restrictive requirement when the two differ.
Looking Ahead
The Stop Corporate Takeovers of Physicians Act of 2026 would establish the first comprehensive federal framework governing physician practice ownership and MSO relationships. While unlikely to advance this Congress given the limited time remaining on the legislative calendar and lack of a Republican cosponsor, the bill reflects growing scrutiny of private investment in physician practices and control exercised through management arrangements.
Organizations with physician practice investments, MSO structures, or pending transactions should monitor the legislation and assess its potential impact alongside existing state CPOM requirements.
We are closely tracking this legislation and related state and federal CPOM developments. Please contact us to discuss how the proposed legislation or existing state-law requirements may affect your organization.
AlstonHealth State Law Hub
Alston & Bird’s Health Care team highlights state legislation and regulatory actions with direct implications for operations, reimbursement, privacy, and enforcement risk. Designed for in-house counsel, the tracker supports legal teams in proactively managing risk and aligning business strategy with a rapidly evolving state regulatory environment.
Learn more on the AlstonHealth State Law Hub.
If you have any questions, or would like additional information, please contact one of the attorneys on our Health Care team.
You can subscribe to future advisories and other Alston & Bird publications by completing our publications subscription form.