Democrats introduce bill targeting corporate ownership of medical practices

Democratic lawmakers introduced legislation Wednesday that would prohibit private equity firms, insurance companies and other for-profit corporations from owning or controlling medical practices, an effort aimed at curbing the growing influence of corporate investors over physicians and patient care.

Sens. Elizabeth Warren of Massachusetts, Ron Wyden of Oregon and Jeff Merkley of Oregon joined Reps. Val Hoyle of Oregon, Alexandria Ocasio-Cortez of New York and Suhas Subramanyam of Virginia in introducing the Stop Corporate Takeovers of Physicians Act.

The legislation would establish a federal prohibition on the corporate practice of medicine and restrict arrangements through which investors can effectively control physician practices while leaving nominal ownership in the hands of doctors.

More than 80% of U.S. physicians are now employed by corporate entities, including private equity firms, insurers and other organizations, according to research cited by the lawmakers. That figure has increased from 62% in 2019.

More than 30 states have some form of restriction on the corporate practice of medicine, but the lawmakers say companies have used legal structures and management services organizations, or MSOs, to circumvent those restrictions.

MSOs typically contract with physician practices to perform administrative functions. Critics of the arrangements say some MSOs can obtain substantial control over clinical operations, staffing, compensation, billing, coding and other decisions that affect how medical care is delivered.

The proposed federal law would prohibit private equity funds, insurance companies and other for-profit corporations from owning or controlling medical practices. It would also close what lawmakers call the “friendly physician” loophole, in which a physician technically owns a medical practice while a corporation or MSO exercises significant control over its operations.

The bill would prohibit MSOs from using “friendly” or “captive” physicians to control medical practices and restrict corporate control over hiring and firing, work schedules, compensation, revenue targets, billing practices, contracting and other business and clinical functions.

It would require physician owners to be meaningfully involved in providing medical care in the state where their practice operates and prohibit corporate interference with clinical decisions. The legislation also would ban certain restrictive employment provisions, including noncompete, nondisclosure and nondisparagement agreements.

“Patients want to know that decisions about their health are being made by their doctors, not by Wall Street investors,” Warren said. “If we’re going to lower costs and un-rig the health care system, we need to stop the corporate takeover of medicine.”

Merkley said Oregon’s experience restricting corporate control of medicine helped provide a model for the federal proposal.

“Billionaire corporations are using sick patients to turn healthy profits, and Americans are fed up,” Merkley said. He said Congress should follow Oregon’s example and impose federal restrictions on corporate ownership and control of medical practices.

Wyden said medical decisions should remain between doctors and patients rather than being dictated by investors.

“Americans want medical decisions to stay between patients and their doctor, not dictated by corporate actors and private equity firms focused on maximizing profits,” Wyden said. He said Oregon’s law has given doctors a mechanism to protect their independence and argued that similar safeguards should apply nationwide.

Hoyle pointed to the growth of corporate employment among physicians.

“Healthcare should not be a line item in a spreadsheet,” Hoyle said. “The Stop Corporate Takeovers of Physicians Act will ensure proper protections are in place, so our healthcare systems serve the best interests of our patients, not corporations.”

Ocasio-Cortez said acquisitions of physician practices by private equity firms and large corporations can create incentives to reduce expenses to increase returns.

“Across the country, private equity firms and corporate conglomerates are buying up American physician offices,” Ocasio-Cortez said. “To increase shareholder profits, these entities often cut corners, leading to patients paying more for significantly worse care.”

She said the legislation would also prohibit what she called “predatory noncompete agreements” for health care workers.

Subramanyam said states have already enacted laws designed to preserve physician independence and argued that Congress should establish similar protections nationally.

“Corporate medicine is making health care more expensive for everyone, and safeguards must be put in place to ensure health care decisions stay in the hands of physicians,” he said.

Modeled on Oregon law

The federal proposal is modeled on an Oregon law restricting corporate control of medical practices.

Oregon lawmakers approved Senate Bill 951 in 2025, establishing restrictions on the ability of MSOs and corporate entities to exercise control over physician-owned practices.

Oregon House Majority Leader Ben Bowman, the law’s author and chief sponsor, said the measure passed with large bipartisan majorities.

“Oregon has shown that it’s possible to stand up to corporate profiteering in healthcare and win,” Bowman said. “Now it’s time to take that fight nationwide.”

Lawmakers pointed to Eugene Emergency Physicians as an example of doctors using Oregon’s restrictions to resist a change in management. The physician group challenged an effort by PeaceHealth to replace local emergency physicians with a private equity-backed staffing company.

The federal bill would go further by creating multiple avenues for enforcement.

According to the Association for Independent Medicine, the proposal could be enforced by the Federal Trade Commission and state attorneys general. Physicians also would receive a private right of action, potentially allowing them to seek treble damages. The legislation also contains mandatory divestment provisions.

The measure has attracted support from several physician, patient advocacy and economic policy organizations, including the American Academy of Emergency Medicine, American Economic Liberties Project, Coalition for Patient-Centered Care, Association for Independent Medicine, Private Equity Stakeholder Project, Families USA, Committee to Protect Health Care and Social Security Works.

The American Academy of Emergency Medicine said physician ownership can help protect doctors’ clinical independence.

“The American Academy of Emergency Medicine believes that local physician ownership of their practice is the best arrangement for the physicians, the medical staff, the hospital and, most importantly, for the patient,” said Dr. Vicki Norton, the organization’s president.

Norton said the legislation would allow physicians to focus on patients without corporate interference. The organization described protecting physician autonomy and patient safety as a central policy priority.

Emma Freer, a senior fellow for health care at the American Economic Liberties Project, said the legislation would strengthen existing state restrictions.

“The Stop Corporate Takeovers of Physicians Act will strengthen long-standing bans on the corporate practice of medicine, ensuring clinical decisions are made by licensed professionals sworn to care for patients, not corporations beholden to shareholders,” Freer said.

Supporters argue that the distinction between administrative and clinical control has become increasingly blurred as corporations acquire physician practices.

Michael Fenne, senior policy coordinator at the Private Equity Stakeholder Project, said decisions about staffing and the amount of time physicians spend with patients can directly influence medical care.

“When investors dictate staffing levels or how much time doctors can spend with patients, they are directing patient care,” Fenne said. “Doctors need the authority to make those decisions based on what their patients need.”

The bill’s supporters include Reps. Yassamin Ansari of Arizona, Yvette Clarke of New York, Chris Deluzio of Pennsylvania, Maxine Dexter of Oregon, Maxwell Frost of Florida, Eleanor Holmes Norton of the District of Columbia and Rashida Tlaib of Michigan.

The legislation enters a debate over private investment in health care in which the industry’s defenders argue that outside capital can provide medical practices with money, technology and administrative resources they otherwise might struggle to obtain.

The American Investment Council, which represents the private equity industry, has defended private investment in health care as a source of capital and operational support.

The legislation’s sponsors, however, contend that regardless of who provides the capital or administrative services, ultimate authority over medical decisions should remain with physicians.