A federal bill that would ban corporate control of physician practices has no grandfather clause. Private equity-backed platforms built on management services organizations could be forced to restructure, unwind or divest if it passes.
The Stop Corporate Takeovers of Physicians Act of 2026 was introduced Sept. 16 by Sens. Elizabeth Warren, D-Mass., Ron Wyden, D-Ore., and Jeff Merkley, D-Ore., and Reps. Val Hoyle, D-Ore., Alexandria Ocasio-Cortez, D-N.Y., and Suhas Subramanyam, D-Va. Legal analysts give it little chance of passing this Congress. Its terms still show how far some federal lawmakers want to go, and several states have already moved in the same direction.
Here are six things to know about where the bill stands and who is most exposed:
1. The bill has not moved past committee. The House version, H.R. 10444, was referred to the Energy and Commerce and Ways and Means committees. It has 17 co-sponsors, all Democrats. In an Oct. 6 analysis, Sidley Austin said “the bill is unlikely to progress in the current Republican-majority Congress,” and that even in future Congresses it would face an uphill climb. The midterm elections are Nov. 3.
2. Existing deals get no protection. The bill’s requirements take effect one year after enactment, and nothing exempts arrangements already in place. Foley & Lardner warned that existing PE and MSO transactions may need restructuring or unwinding “even where such arrangements were lawfully structured at the time of execution.” Courts that find a violation must order the conduct to stop and, where applicable, order divestiture. When they order divestiture, they must also require disgorgement of revenue received from the divested entity during the violation period.
3. MSO-based platforms are the main target. The bill would bar MSOs from owning, financing or controlling practice ownership interests. It would also bar them from exercising de facto control over hiring, compensation, scheduling, coding, billing, pricing or payer contracting. Physician owners would have to be licensed and present in the state and substantially engaged in patient care, which targets “friendly physician” structures. Management fees would have to be consistent with fair market value as determined by the Federal Trade Commission.
4. Valuations would lose two key supports. The bill would void noncompetes for physicians and advanced practice providers. The only exception is for physician owners holding at least 25% of a practice, and Phelps Dunbar noted that, “unlike many state laws, there is also no carve-out for sale of a practice or business.” Foley said the arm’s-length contracts and FTC-set fair market value fees would “substantially constrain deal structuring and purchase prices.”
5. Specialties with deep PE penetration face the most exposure. The bill doesn’t single out any specialty, but its reach follows where PE has invested most heavily:
Anesthesiology: Anesthesia groups made up 19.4% of PE-acquired physician groups from 2013 to 2016, according to a February 2026 review in Anesthesiology.
Gastroenterology: About 14% of GI clinical sites are PE-affiliated, according to a January study in Clinical Gastroenterology and Hepatology.
Cardiology: PE firms made more than 340 acquisitions of cardiology clinics since 2013, more than 94% of them from 2021 to 2023, according to a 2024 report in the Journal of the American College of Cardiology.
Ophthalmology: 70.4% of ophthalmologists were in private practice in 2024, according to AMA data. Group deal volume fell from more than 300 transactions in 2021 to fewer than 100 in 2025, according to VMG Health.
6. States are already enforcing similar rules. The federal bill is modeled on Oregon’s SB 951, and it would preserve state laws that are equally or more restrictive. California’s SB 351 took effect Jan. 1. On June 26, the California attorney general announced a $4.5 million settlement with Carbon Health and its co-founder over a “friendly PC” arrangement. Connecticut enacted a private equity oversight law this year, and Pennsylvania and Rhode Island lawmakers have introduced related bills. Platforms in states with enacted laws face compliance risk whatever happens to the federal bill.
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