A Federal Bill Would Ban Corporations From Owning Medical Practices. Its Ownership Ban Exempts Hospitals, Which Added 44,000 Physicians in Two Years.

Eighty-two percent of American physicians now work for a hospital, health system or corporate entity, measured as of January 1 of this year by PAI and Avalere Health. Physician-owned practice holds the other 18 percent.

A bill introduced in Congress on September 16 would make corporate ownership of a medical practice unlawful. Then it exempts the employers that added the most physicians.

What the text says

H.R. 10444, the Stop Corporate Takeovers of Physicians Act of 2026, does its main work in Section 2(a)(1). It makes it unlawful for any partnership or corporate entity that is not majority-owned and controlled by licensees to own or control a medical practice, to employ a licensee, or to practice medicine.

Majority-owned and controlled is defined rather than left to argument. The clinicians have to hold a majority of the ownership interest and make up a majority of the governing body. Both, not either.

Section 2(c) then puts conditions on the owners themselves. A licensee who owns a practice has to be licensed and present in a state where that practice furnishes services, and substantially engaged in delivering medical care. A national holding company with one nominal physician owner doesn’t clear that.

Enforcement has three doors. The FTC treats a violation as an unfair or deceptive act, state attorneys general can sue on behalf of residents, and any injured person gets a private right of action with treble damages and attorney’s fees. A court can order divestment and disgorgement of revenue collected while in breach.

An independent DPC practice satisfies every one of those requirements on the day it opens. That’s the reason the bill reads as friendly to the model. The complication is in what it doesn’t reach.

The ownership ban stops at the hospital door

Section 2(a)(3) lists the exceptions. The prohibition does not apply to any non-profit or public health care provider, or to a hospital, a hospital-affiliated clinic, a critical access hospital or a rural emergency hospital.

Set that against who actually does the employing. The sponsors’ one-pager cites “over 80 percent of doctors in the United States” as employed by corporate entities, and gives no hospital share at all. PAI’s report does break it out: 59.7 percent of physicians employed by hospitals, 22.3 percent by corporate entities such as insurers and private equity firms. Hospitals and corporations added 48,100 employed physicians in 2024 and 2025 between them, and hospitals took 44,000 of those.

So the exemption reaches most of that 59.7 percent. The corporate 22.3 percent gets no blanket cover. The two sets don’t line up, though. PAI sorts employers into hospitals and corporate entities, while 2(a)(3)(A) turns on whether a provider is non-profit or public. For a physician weighing whether to stay independent, the bill closes the private equity exit and leaves the health system exit open.

The carve-out is narrower than it first looks. In a post Douglas Farrago quoted at DPC News, the ophthalmologist Will Flanary noted that the bill “doesn’t address non-profit hospital direct ownership of physicians,” then argued it still reaches hospitals other ways. The text bears him out. Section 2(a)(3) is written to subsection (a) alone, so it lifts the ownership ban and lifts nothing in subsection (b), where the protections for employed clinicians live. Those bind any “health care provider,” defined in 2(d)(2) as any entity that delivers health care services. A hospital sits inside that.

Flanary also says the Oregon original covered hospitals until the American Hospital Association won an exemption for non-profits. That account is his rather than something the Oregon record states on its face, and it’s the reason to watch the exception list if this bill moves.

The non-compete provision is the one a DPC physician would feel

Section 2(b)(1)(A) makes it unlawful for any licensee, health care provider or management services organization to enter a non-compete clause, a non-disclosure agreement or a non-disparagement agreement. Clause (ii) then says any agreement described in clause (i) is void and unenforceable. Clause (i) is written as a ban on entering one, so whether that voiding reaches a contract already signed is a question the text leaves open.

There’s a single exception, and it covers non-competes only. Clause (iii) keeps a non-compete between a licensee and their own medical practice valid if the licensee “is a shareholder or member of the medical practice or otherwise owns or controls an ownership or membership interest that is equivalent to 25 percent or more” of the practice. Two prongs, joined by an or. The first names no percentage at all.

Read that from both sides. A physician leaving an employed job to open a DPC practice in the same county is negotiating against a restrictive covenant today, and this provision would erase it rather than narrow it. A DPC owner hiring a second doctor couldn’t bind that hire without first making them a shareholder or member, and how large a stake that takes is the ambiguity above. The provision that most helps a physician starting out is the same one that constrains a DPC practice growing past one clinician.

The MSO definition describes the DPC software stack

Section 2(d)(4)(A) defines a management services organization as an entity that contracts with a medical practice to provide services for compensation, and then lists them. Among the items: billing and collection, coding, information technology services, patient scheduling, payer contracting and payroll.

A membership billing layer does billing and collection. A DPC-specific EHR does information technology services and patient scheduling. Practices running on Hint Health, Atlas.md, SigmaMD or Elation Health are buying the services that definition names, and nothing in the text conditions MSO status on ownership, investor backing or deal size.

Section 2(b)(2)(A) then tells an MSO what it may not do. Clause (vi) bars it from contracting with a practice unless the practice negotiated at arm’s length through legal counsel, negotiators and financial advisors it picked without the MSO’s involvement, and unless the compensation reflects fair market value as determined by the FTC. Clause (vii) bars advertising a practice’s services under the name of an entity that is not the practice, which describes most directory and marketplace listings.

Read literally, a solo physician clicking through a monthly software agreement would need a lawyer and a financial advisor to do it. The target is plainly the private-equity MSO that owns the practice in everything but name. The text doesn’t draw that line, and the bill hands the FTC rulemaking authority in 2(e)(1)(B)(v) to draw it later.

Where it actually stands

Val Hoyle of Oregon introduced H.R. 10444 with ten cosponsors, and two more signed on September 24. All thirteen members are Democrats. It went to Energy and Commerce and to Ways and Means, and referral is the only action on the record. Warren, Wyden and Merkley introduced the Senate companion the same day, and it carries the number S. 5419, read twice and referred to Commerce, Science, and Transportation. Its text is another matter. The version posted on Warren’s site is the Legislative Counsel draft with the bill number still blank. govinfo listed no text version when this post was written on September 30; the introduced text posted shortly afterward.

The sponsors’ one-pager says the bill is “modeled on a landmark law in Oregon,” and gives no bill number. Oregon’s SB 951, enrolled in the 2025 regular session, is the state law it points at. SB 951 does not bar a management services organization from managing a practice under contract — it defines an MSO as exactly that. What it bars is control: owning or controlling a majority of shares in a contracted practice, serving as its director or officer, voting its shares by proxy, or exercising de facto control over its operations. Section 4 treats the federal bill as a floor rather than a ceiling, preserving any state law that imposes equal or stricter requirements, and Section 2(f) delays everything until one year after enactment.

Douglas Farrago at DPC News put the odds bluntly: “Ultimately, this bill will fail, and the future of Direct Primary Care falls on the consciences of those doctors practicing right now.” He’s right on the arithmetic.

The Open Question

Nobody can tell you today whether your membership billing platform is a management services organization under this bill. The definition in 2(d)(4)(A) says yes on its face. The purpose of the section says no. The FTC would settle it in rulemaking that can’t begin until a bill passes that has no Republican support and no hearing date.

That’s an unsatisfying answer and it’s the honest one. If you’re weighing a platform contract this year, the bill changes nothing about that decision. If a federal corporate-practice statute ever does pass, the line between a vendor and an owner is the provision to read first, and it won’t be in the bill text.