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.

For residents, signing an employment agreement can happen surprisingly early.

Some physicians receive offers during their final year of residency. Others are approached as early as during PGY-2. In some specialties and markets, employers may begin recruiting even earlier.

And the offer can be tempting. Sign now, receive a monthly stipend or other financial support during residency, and have a job waiting for you when training ends.

That can be a great arrangement. But signing an employment agreement two or three years before you actually start working is a very different decision from signing one 6-months before graduation.

The question is not simply whether the offer is good today. It is whether you are comfortable committing your future self to that offer.

Why Signing Early Can Make Sense

There are real advantages to securing a position early.

The most obvious is money. Residency salaries are not exactly known for being generous, and an employer-sponsored stipend can provide meaningful additional income during training. Depending on the arrangement, an employer may also offer a signing bonus, student loan assistance, relocation assistance, or other financial incentives well before the physician’s start date.

There is also value in certainty.

Signing early can eliminate the stress of conducting a job search during the final months of residency or fellowship. You know where you are going, what you will be earning, and, at least generally, what your professional life will look like after training.

For a physician who already knows where he or she wants to live and practice, that certainty may be worth a lot.

But there is a tradeoff.

A Lot Can Change in Two or Three Years

Suppose you are a PGY-2 resident and sign an employment agreement today for a position that begins after graduation.

By the time you actually start, a lot may have changed.

The hospital or practice may have new leadership. Physicians you expected to work with may have left. The call structure may have changed. The practice may have been acquired. Your spouse or partner may receive an opportunity somewhere else. Your own career interests may change.

The market for your specialty can change too.

Compensation that looks competitive today may look very different two or three years from now. Signing early can mean locking in compensation before you know what the market will look like when you actually enter it.

None of those possibilities necessarily means you should not sign early. They do mean that the length of time between signing and starting should be part of your analysis.

The Stipend Is Usually Not Free Money

This is one of the most important things to understand about early employment agreements.

If an employer is paying you during residency, there are almost always strings attached.

A residency stipend may be conditioned on actually beginning employment and remaining employed for a specified period of time. If you change your mind, fail to start, or leave early, the agreement may require you to repay some of all of the money you received.

Sometimes repayment obligations are forgiven gradually over time. Sometimes they become immediately due after certain events. And sometimes the amount owed can include more than the cash that actually hit your bank account.

That changes the calculation.

A $2,000 monthly stipend for two year sounds like an additional $48,000 during residency. But if accepting that money creates a $48,000 repayment obligation if your plans change, you should understand that obligation before treating the stipend as additional compensation.

The longer the period between signing and starting, the more important those provisions become.

Ask What You Are Actually Locking In

An early employment agreement should be reviewed not only for what it gives you, but also for what it prevents you from reconsidering later.

Among other things, residents should understand:

• Compensation: Is your future salary fixed now? Can the employer change the compensation methodology before you start? Are productivity thresholds or bonus formulas clearly defined?
• Stipend Repayment: When must the stipend be repaid? Is repayment prorated? Is it forgiven over time? What happens if you cannot start because of circumstances outside of your control?
• Termination Before Start Date: Can either party walk away before employment begins? If so, what happens to any stipend, signing bonus, or other advance payments?
• Restrictive Covenants: Are you agreeing today to a non-compete or non-solicitation restriction that could affect your options years from now?
• Practice Location: Are you committing to a specific facility, or can the employer assign you to other locations?
• Schedule and Call: Are these obligations actually defined in the agreement, or are you relying on what you were told during recruitment?
• Outside Activities: Will the agreement restrict moonlighting, teaching, consulting, research, or other professional activities?
• Malpractice and Tail Coverage: Who pays for coverage, and who bears the cost of tail coverage if the relationship ends?
• Changes Before Start Date: What happens if the practice is sold, reorganized, or materially changes before you ever work your first day?

The American Medical Association also recommends that physicians understand not only compensation, but the duties, benefits, restrictive covenants, liability coverage, and termination provisions contained in an employment agreement.

The details matter because you are making the decision based on what you know today while agreeing to obligations that may not become relevant for several years.

The Earlier You Sign, the More Flexibility Matters

There is an important distinction between signing an agreement nine months before graduation and signing on 3 years before graduation.

The further away your start date is, the harder it is to predict your circumstances.

That makes flexibility particularly valuable in early-signing agreements.

For example, a resident signing years in advance may want to pay particular attention to provisions governing repayment obligations, pre-employment termination rights, changes in compensation, assigned locations, and what happens if the employer undergoes a significant organizational change before the start date. See our 10 Significant Physician Contract Mistakes article for some examples.

The goal is not necessarily to create a contract that lets you walk away whenever you want without consequence. An employer providing significant financial support during residency reasonably wants some assurance that you will actually show up for work when the time comes.

The goal is to understand how much flexibility you are giving up in exchange for that support.

So, When Should You Sign?

There is no universal answer.

If you know where you want to live, know the organization, like the opportunity, receive competitive compensation, and understand the obligations associated with any stipend or signing bonus, signing early can make perfect sense. The additional income and certainty during residency can be a great advantage.

But the stipend should not be the only reason you sign.

The earlier you commit, the more uncertainty you are accepting about your future circumstances, your employer, and the employment market. In effect, part of what the employer may be paying for is your willingness to make that commitment early.

Before signing an agreement that will not begin for another two or three years, ask yourself a slightly different question than whether you like the job today:

If my circumstances change between now and graduation, how difficult and expensive will it be to change my mind?

The answer is often somewhere in the employment agreement.

And that is something worth understanding before the first stipend check arrives.

Frequently Asked Questions

How early can a physician sign an employment agreement?

There is no standard time when a physician must wait to sign an employment agreement. Some physicians sign during their final year of residency or fellowship, while others receive offers much earlier in training. The earlier you sign, however, the more important it is to consider what could change between signing the agreement and your actual start date.

Should I sign a physician employment agreement during residency?

It depends on the opportunity and your circumstances. Signing during residency can provide financial benefits, such as a residency stipend or signing bonus, as well as the certainty of having a job after training. The tradeoff is committing to an employer, location, compensation structure, and contractual obligations potentially years before you will actually begin working.

Do I have to repay a residency stipend if I change my mind?

Possibly. Many residency stipend arrangements require repayment if the physician does not begin employment or leaves before completing a specified service period. The agreement should explain when repayment is required, whether the obligation is forgiven over time, and whether any exceptions apply.

Can I get out of a physician employment agreement before my start date?

That depends on the agreement. Some physician employment agreements permit termination before the start date, while others impose repayment obligations or other consequences if the physician does not begin employment. Before signing, understand both your termination rights and the financial consequences of exercising them.

Earlier this year, we saw one significant example of that enforcement strategy when Aetna agreed to pay $117.7 million to resolve False Claims Act allegations involving inaccurate diagnosis codes submitted through the Medicare Advantage program.

Since then, the enforcement activity has accelerated.

Over the past several months, CMS and DOJ have announced a series of enforcement actions involving billions of dollars in suspected or allegedly improper Medicare claims. Although the cases involve different types of providers and different alleged conduct, several themes are beginning to emerge.

For healthcare providers, the message is increasingly clear: federal enforcement is becoming more data-driven, more proactive, and increasingly focused on identifying suspicious billing patterns before the money is paid.

Medicare Advantage Remains a Major Enforcement Target

The Aetna settlement was not an isolated Medicare Advantage case.

In June, Matrix Medical Network, HealthFair, and HealthFair’s founder agreed to pay a combined $56.5 million to resolve False Claims Act allegations involving diagnoses generated through in-home health assessments of Medicare Advantage beneficiaries.

The government alleged that diagnoses identified during those assessments were submitted for risk-adjustment purposes even though certain diagnoses were not supported by the beneficiaries’ medical records or did not result from sufficiently comprehensive examinations.

Then, in August, Complete Health Partners Holdings agreed to pay $14.1 million to resolve allegations that it caused false diagnosis codes to be submitted through the Medicare Advantage program. That same month, Monogram Health agreed to pay $2.4 million to resolve similar allegations involving diagnosis codes used to increase Medicare Advantage payments.

The largest development came later in August, when The Villages Health System agreed to a $541.5 million settlement after self-disclosing conduct involving allegedly unsupported diagnosis codes used for Medicare Advantage risk adjustment.

Take together with the Aetna settlement, these cases demonstrate that Medicare Advantage risk adjustment remains one of the government’s most active healthcare enforcement areas.

Why it matters: Providers participating in Medicare Advantage arrangements should not view diagnosis coding as merely an administrative function. Diagnoses that affect risk-adjusted payments must be supported by the medical record, and organizations should have processes for identifying and correcting unsupported diagnoses.

CMS Is Increasingly Trying to Stop Payments Before They Happen

Some of the most significant recent developments have not involved False Claims Act settlements at all.

In August, CMS announced that its enforcement efforts had prevented more than $1.6 billion in potentially improper Medicare laboratory payments. According to CMS, those efforts included revoking the Medicare enrollment of 157 laboratory providers, resulting in approximately $732 million in savings.

CMS described several examples in which its systems identified unusual billing shortly after a laboratory began submitting claims. In one instance, CMS identified a laboratory suspected of billing for services that were never performed, denied approximately $1.2 million in claims, continued monitoring the laboratory after its billing practices changed, and ultimately suspended additional payments and revoked the provider.

CMS also reported that, since January 1, 2026, its Fraud Defense Operations Center had suspended more than $371 million in Medicare payments involving 267 providers and suppliers. Those suspensions included more than $226 million associated with suspected durable medical equipment billing, more than $53 million involving skin substitutes, and more than $23 million involving hospice providers.

Why it matters: Historically, providers may have thought about fraud enforcement primarily in terms of audits, investigations, or False Claims Act litigation occurring months or years after claims were submitted. CMS is increasingly emphasizing real-time and prepayment intervention. Sudden changes in billing volume, unusual utilization patterns, newly enrolled entities, and other statistical anomalies can trigger scrutiny before claims are paid.

Durable Medical Equipment Is Under Particularly Heavy Scrutiny

In September, CMS announced that it had identified 11 durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) companies associated with more than $3.4 billion in suspected fraudulent billing during 2025 and 2026.

According to CMS, the companies had no claims history before 2025 and subsequently submitted enormous volumes of claims. CMS identified billing involving beneficiaries who were deceased as well as beneficiaries who allegedly never requested or received the equipment being billed.

CMS moved to bar the companies from receiving future Medicare Advantage Part C and Part D payments.

This action follows CMS’s broader focus on DMEPOS as a high-risk area for program integrity enforcement.

Why it matters: Extreme billing patterns are increasingly easy for CMS to identify. Providers and suppliers should assume that CMS is comparing their claims activity against historical billing, peer organizations, beneficiary information, utilization patterns, and other available data.

Medical Necessity and Kickbacks Remain A Focus

New technology may be changing how the government identifies potential fraud, but many of the underlying compliance problems remain familiar.

In July, Access DX Laboratory, its former CEO, and a Florida businessman agreed to pay a combined $36.4 million to resolve False Claims Act allegations involving genetic testing.

The government alleged that the defendants paid kickbacks to marketers for patient referrals, paid telemedicine providers for fraudulent physician orders, unbundled genetic-testing billing codes, and billed Medicare and Medicaid for medically unnecessary testing.

Similarly, earlier this year, Traditions Health agreed to pay $34 million after self-disclosing allegations involving medically unnecessary home health services and financial benefits provided to physician medical directors who referred Medicare beneficiaries to the company.

And in May, Takeda Pharmaceuticals agreed to pay approximately $13.7 million to resolve allegations that it provided improper payments to healthcare providers to induce prescriptions of an antidepressant medication reimbursed by federal healthcare programs.

Why it matters: The Anti-Kickback Statute and medical-necessity requirements remain central enforcement tools. Providers should pay particular attention to relationships involving referral sources, medical director arrangements, marketers, telemedicine providers, laboratories, and other third parties whose compensation or activities may influence federally reimbursed services.

CMS Is Also Using Enrollment as an Enforcement Tool

CMS’s enforcement strategy is extending beyond individual claims.

In May, CMS imposed a nationwide six-month moratorium on new Medicare enrollment for home health agencies and hospice providers. The moratorium also applies to certain changes in majority ownership.

CMS characterized home health and hospice as high-risk provider categories and explained that the moratorium was intended to prevent potentially fraudulent providers from entering Medicare while the agency continues its program-integrity efforts.

The agency has also expanded enhanced oversight and prepayment review initiatives targeting hospice providers.

Why it matters: Medicare enrollment itself is increasingly part of CMS’s fraud-prevention strategy. Providers operating in sectors CMS considers high risk should expect greater scrutiny not only of claims, but also of enrollment applications, ownership changes, certifications, and continued participation in Medicare.

The Scale of Enforcement Is Growing

These individual actions are part of a much larger enforcement effort.

In June, DOJ announced its 2026 National Health Care Fraud Takedown, resulting in charges against 455 defendants, including 90 physicians and other licensed medical professionals, in connection with more than $6.5 billion in alleged fraudulent claims.

The cases involved a wide range of alleged schemes, including durable medical equipment, skin substitutes and wound care products, laboratory testing, hospice services, and other medically unnecessary or unprovided services.

Meanwhile, CMS reports that its Medicare program-integrity efforts produced $41.9 billion in savings during fiscal year 2025, a 59% increase from the prior year.

Those numbers help explain why healthcare fraud enforcement continues to receive substantial federal attention.

What Recent Medicare Fraud Enforcement Actions Tell Providers

The recent enforcement activity does not point to a single new compliance risk. Instead, it shows how the government’s approach to healthcare fraud is evolving.

Several themes stand out:

1. Data matters. CMS has repeatedly emphasized its use of advanced data analytics to identify unusual billing patterns. Providers should be conducting their own billing and coding reviews rather than waiting for CMS to identify an anomaly first.
2. Medicare Advantage remains a priority. The Aetna, Matrix, Complete Health, Monogram Health, and Villages Health matters all involved risk-adjustment diagnoses. Providers participating in Medicare Advantage arrangements should ensure that diagnoses affecting reimbursement are properly documented and supported.
3. Medical necessity remains fundamental. Whether the service involves laboratory testing, home health, hospice, wound care, or another service line, documentation should establish why the service was reasonable and necessary for the individual patient.
4. Referral relationships remain dangerous territory. Marketing arrangements, medical directorships, telemedicine relationships, and other financial arrangements involving referral sources continue to generate Anti-Kickback Statute and False Claims Act exposure.
5. Compliance increasingly needs to happen before the claim is submitted. CMS is investing heavily in tools designed to detect suspicious activity, suspend payments, revoke enrollments, and prevent improper payments rather than simply recover them later.

When DOJ and HHS announced their False Claims Act Working Group last year, the government said it intended to combine interagency coodination with enhanced data mining to identify healthcare fraud.

The enforcement record over the past several months suggests that was more than an announcement of priorities. We are now seeing what that strategy looks like in practice.

For providers, the best response is not simply to watch the government’s next enforcement action and rather look at their own data to ensure compliance.

Physician Non-Compete Laws: A 50-State Guide (2026)

By Adam Appleberry | Current as of September 2026

The landscape for physician non-competes is changing rapidly.

Over the last several years, states across the country have enacted new laws limiting, and in some cases outright banning, non-competes for physicians and other healthcare providers.

But the rules are far from uniform. In some states, physician non-competes are completely void. In others, they remain enforceable but are limited by duration, geographic scope, compensation, employer type, or the circumstances surrounding termination. And in plenty of states, they remain generally enforceable.

Simply put, there is no single rule governing physician non-competes across the country.

So, where does your state fall?

The map below provides a state-by-state snapshot of physician non-compete laws as of September 2026.

🟢 Banned / Void for Physicians
🔵 Allowed, but Significantly Restricted
🟡 Allowed, with Some Restrictions
🔴 Generally Allowed

How to Read the Map

I have divided the states into four general categories:

🟢 Banned / Void for Physicians. Physician non-competes are generally prohibited or unenforceable.

(Alabama*, Arkansas, California, Colorado, Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Virginia, and Wyoming)

🔵 Allowed, but Significantly Restricted. Physician non-competes are still permitted, but state law places meaningful limits on them, such as a maximum duration or geographic radius, or makes them unenforceable in certain circumstances.

(Connecticut, Delaware, Indiana, Louisiana, Maryland, Pennsylvania, Tennessee, Texas, Washington, West Virginia, and Washington, D.C.)

🟡 Allowed, with Some Restrictions. Physician non-competes remain generally permissible, but other state laws may affect when or how they can be enforced.

(Florida, Illinois, Iowa, Nevada, and Wisconsin)

🔴 Generally Allowed. Physician non-competes remain generally permissible, subject primarily to traditional requirements that the restriction be reasonable.

(Alaska, Arizona, Georgia, Hawaii, Idaho, Kansas, Kentucky, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, South Carolina, and Vermont)

*Alabama reaches this result through its treatment of physicians as professionals rather than through a physician-specific statutory ban.

One important caveat: the map is intended as a general snapshot, not a definitive answer as to whether a particular non-compete is enforceable. The details matter. The date you signed your agreement, your specialty, your compensation, how your employment ended, and the specific language of the restriction can all change the analysis.

Also, a state prohibiting non-competes does not necessarily mean your contract cannot restrict you in other ways. Patient non-solicitation provisions, confidentiality requirements, repayment obligations, and restrictions connected to the sale of a practice or ownership interest may be treated differently.

What Happened to the FTC’s Nationwide Non-Compete Ban?

Before getting into the states, it is worth addressing the federal rule that received significant attention in 2024.

In April 2024, the Federal Trade Commission issued a rule that would have prohibited most employee non-compete agreements nationwide. The rule was challenged in federal court and never became enforceable. The FTC ultimately abandoned its effort to defend the rule.

So, there is currently no nationwide FTC ban on physician non-competes.

That does not mean federal regulators have completely left the issue alone. The FTC has instead pursued non-competes through more targeted enforcement actions, including scrutiny of restrictive covenants in healthcare.

And the answer varies significantly depending on where you practice.

State-by-State Guide

Alabama Physician Non-Compete Law 🟢

Physician non-competes are generally unenforceable in Alabama.

Although Alabama law permits certain restrictive covenants, physicians have traditionally been treated as professionals whose ability to practice cannot be restricted through an ordinary employment non-compete.

That does not necessarily mean every restriction in a physician’s agreement is invalid. Restrictions connected to the sale of a practice, ownership interests, confidential information, or other contractual obligations may be treated differently.

For an employed physician, however, Alabama is generally a non-compete-friendly state from the physician’s perspective.

Alaska Physician Non-Compete Law 🔴

Alaska does not have a physician-specific non-compete law.

That means physician non-competes may be enforceable if they are reasonable and protect a legitimate interest of the employer.

For physicians, the important questions are usually how long the restriction lasts, how large the geographic area is, what activities are actually prohibited, and whether the restriction goes further than necessary to protect the practice.

There is no simple statutory mileage or time limit that automatically answers the question.

Arizona Physician Non-Compete Law 🔴

Arizona allows physician non-competes, but courts scrutinize them carefully because of the effect they can have on patients.

Patient choice and continuity of care are particularly important considerations.

So, while a physician non-compete is not automatically invalid in Arizona, an employer generally cannot impose a restriction that unnecessarily interferes with a physician’s ability to continue practicing or with patients’ ability to continue seeing their physician.

The specific specialty, geographic area, duration, and availability of other physicians can all matter.

Arkansas Physician Non-Compete Law 🟢

Arkansas changed its physician non-compete law in 2025.

Under the new law, a covenant that restricts a physician’s ability to practice within the physician’s scope of practice is generally void.

For physicians practicing medicine or osteopathy, that means an employer generally cannot prevent the physician from continuing to practice after leaving employment.

Other restrictions, including confidentiality obligations and certain protections involving business information, may still remain enforceable.

California Physician Non-Compete Law 🟢

California has long taken one of the strongest positions against non-competes in the country.

Physician employment non-competes are generally void.

California has also taken additional steps to prevent employers from using contracts governed by another state’s law to avoid California’s restrictions, and newer legislation addresses restrictive covenants in certain healthcare ownership and management arrangements.

There are important exceptions, particularly when a physician sells a business or ownership interest.

But for a physician simply leaving employment, a traditional agreement prohibiting the physician from practicing nearby is generally unenforceable.

Colorado Physician Non-Compete Law 🟢

Colorado now generally prohibits non-competes for physicians, dentists, and advanced practice registered nurses.

For agreements entered into on or after August 6, 2025, employers generally cannot prevent these providers from continuing to practice after leaving.

Colorado also protects a departing provider’s ability to communicate certain information to patients, which can be just as important as the non-compete itself.

Older agreements require separate analysis, so physicians who signed their contracts before the law changed should not automatically assume the newer prohibition applies.

Connecticut Physician Non-Compete Law 🔵

Connecticut allows physician non-competes, but places clear limits on them.

A physician restriction generally cannot last longer than one year or extend more than fifteen miles from the physician’s primary practice site.

How the employment relationship ends also matters. The law limits enforcement in certain situations where the employer terminates the physician without cause or declines to renew the agreement.

So, if you are a Connecticut physician reviewing a non-compete, the duration and mileage are only part of the analysis. You should also look closely at the termination provisions in your agreement.

Delaware Physician Non-Compete Law 🔵

Delaware takes an unusual approach to physician non-competes.

An agreement generally cannot prohibit a physician from practicing medicine in a particular geographic area after leaving a practice.

However, the agreement may still require the physician to pay reasonable damages if the physician competes.

That distinction is important. Your former employer may not necessarily be able to stop you from opening or joining a competing practice, but there may still be a significant financial consequence for doing so.

Florida Physician Non-Compete Law 🟡

Florida generally allows physician non-competes.

There is no statewide ban on restricting physicians from competing after employment, and Florida law is relatively favorable to enforcement when the employer has a legitimate business interest and the restriction is reasonably tailored to protect it.

Florida does have a narrow physician-specific restriction that can apply when a single entity employs or contracts with all physicians practicing a particular specialty within a county.

For most physicians, however, the important questions remain the length of the restriction, the geographic area, the employer’s legitimate business interests, and the circumstances surrounding the physician’s practice.

Georgia Physician Non-Compete Law 🔴

Georgia generally allows physician non-competes.

A restriction still needs to be reasonable, but Georgia law is comparatively favorable to employers seeking to enforce restrictive covenants.

Courts also have greater ability than courts in some states to narrow an overly broad restriction rather than throwing it out entirely.

For a physician, that means an aggressive non-compete should not automatically be assumed unenforceable simply because part of it appears too broad.

Hawaii Physician Non-Compete Law 🔴

Hawaii does not have a physician-specific prohibition on non-competes.

Although Hawaii has prohibited non-competes for certain technology workers, that protection does not generally extend to physicians.

Physician restrictions therefore remain potentially enforceable if they satisfy the state’s general requirements.

Idaho Physician Non-Compete Law 🔴

Idaho generally permits non-competes for certain key employees and independent contractors, which can include physicians.

There is no broad physician or healthcare exemption.

As a result, physicians should pay particular attention to the duration, geographic scope, and activities covered by the restriction before signing.

Illinois Physician Non-Compete Law 🟡

Illinois allows physician non-competes but regulates restrictive covenants more broadly through compensation thresholds and procedural requirements.

For example, employees must receive advance notice of the non-compete and must be advised in writing that they have the right to consult with an attorney before signing.

Illinois also prohibits non-competes for employees below specified compensation levels, although most physicians will earn above the applicable threshold.

So, for most physicians, a non-compete remains possible, but the employer must satisfy the state’s statutory requirements.

Indiana Physician Non-Compete Law 🔵

Indiana has significantly restricted physician non-competes in recent years.

Primary care physician non-competes are prohibited for newer agreements, and more recent legislation has substantially limited non-competes imposed by hospitals, hospital systems, and certain affiliated entities.

Other physician non-competes may still be enforceable, but Indiana law provides additional protections involving patient records, patient notification, and the physician’s ability to buy out the restriction.

The practical question in Indiana is no longer simply whether you are a physician, but rather who employs you, what type of medicine you practice, and when you signed the agreement, as these factors all can change the answer.

Iowa Physician Non-Compete Law 🟡

Iowa generally allows reasonable physician non-competes.

There is no statewide prohibition covering physicians working for private practices, hospitals, or most other healthcare employers.

There are, however, some targeted exceptions. Healthcare employment agencies face certain restrictions, and legislation effective July 1, 2026 requires the University of Iowa Hospitals and Clinics to prohibit non-competes in certain healthcare provider employment agreements.

For most Iowa physicians outside those specific situations, traditional non-compete rules still apply.

Kansas Physician Non-Compete Law 🔴

Kansas generally allows physician non-competes.

There is no physician-specific statutory ban, and Kansas courts have historically enforced physician restrictions when they are reasonably tailored.

For physicians, the key issues are typically the length of the restriction, geographic area, specialty being restricted, and whether the employer has a legitimate interest that actually needs protection.

Kentucky Physician Non-Compete Law 🔴

Kentucky does not have a comprehensive physician non-compete ban.

Physician restrictions may therefore be enforceable if they are reasonable.

As in many states without healthcare-specific legislation, the analysis will depend heavily on the actual contract language, including how long the restriction lasts, where it applies, and what type of work the physician is prohibited from performing.

Louisiana Physician Non-Compete Law 🔵

Louisiana allows physician non-competes, but the rules are unusually specific.

A Louisiana non-compete generally must identify the parishes or municipalities where the restriction applies rather than simply using a mileage radius.

Physicians also receive additional protection based on how long they have worked under the agreement. Under newer legislation, the ability to enforce the non-compete expires after a specified period of employment, generally three years for certain primary care physicians and five years for other physicians.

So, in Louisiana, how long you have worked for the employer may be just as important as how long the non-compete lasts after you leave.

Maine Physician Non-Compete Law 🟢

Maine significantly expanded its healthcare non-compete protections in 2026.

For newer agreements, non-competes are generally prohibited for covered healthcare practitioners who do not have an ownership interest in the employer.

That ownership distinction matters. An employed physician with no ownership interest may receive substantially greater protection than a physician who is also an owner of the practice.

The new law applies prospectively, so physicians with older agreements should have those agreements analyzed under the law that applied when they were signed or renewed.

Maryland Physician Non-Compete Law 🔵

Maryland uses a compensation-based approach for healthcare providers.

For covered providers who provide direct patient care and earn $350,000 or less annually, non-competes are generally prohibited.

Physicians earning more than $350,000 may still be subject to a non-compete, but the restriction is generally limited to one year and ten miles from the physician’s primary place of employment.

That means compensation itself can determine whether a Maryland physician may be restricted at all.

Massachusetts Physician Non-Compete Law 🟢

Massachusetts generally prohibits physician non-competes.

An agreement restricting a physician’s ability to practice medicine after leaving employment is generally unenforceable.

Massachusetts has maintained this physician-specific protection for decades, even though non-competes remain permissible in certain other employment contexts.

Other contractual restrictions, including confidentiality obligations and restrictions connected to the sale of a practice, should still be reviewed separately.

Michigan Physician Non-Compete Law 🔴

Michigan generally allows physician non-competes.

A restriction must still be reasonable in duration, geography, and the type of work being restricted.

Michigan courts also have the ability to narrow an overly broad covenant rather than necessarily invalidating the entire restriction.

For physicians, that means a non-compete that appears too broad on its face should not automatically be assumed unenforceable.

Minnesota Physician Non-Compete Law 🟢

Minnesota prohibits most employee non-competes entered into on or after July 1, 2023.

That prohibition applies to physicians.

The date of the agreement is therefore particularly important. A physician who signed a non-compete before July 1, 2023 may be in a different position from a physician who signed the same restriction after that date.

The law also does not eliminate every type of restrictive covenant, so confidentiality, trade secret, and certain non-solicitation provisions may still matter.

Mississippi Physician Non-Compete Law 🔴

Mississippi does not have a physician-specific non-compete statute.

Physician non-competes may therefore be enforceable if they are reasonable.

Courts can consider the public interest, including the effect a restriction may have on access to medical care, but there is no automatic rule making physician restrictions invalid.

Missouri Physician Non-Compete Law 🔴

Missouri generally allows physician non-competes.

There is currently no statewide physician-specific prohibition, although healthcare non-compete legislation has been proposed.

For now, physicians should expect enforceability to depend primarily on whether the restriction is reasonable in duration, geography, and scope.

Montana Physician Non-Compete Law 🟢

Montana significantly expanded non-compete protections for healthcare professionals beginning in 2026.

For covered newer contracts, employers generally cannot prevent physicians and other covered healthcare professionals from continuing to practice after leaving.

The law also limits certain restrictions involving a provider’s existing patients.

As in several other states, exceptions may apply to practice sales, ownership transactions, and repayment of certain recruitment incentives.

The date of the agreement or renewal is important.

Nebraska Physician Non-Compete Law 🔴

Nebraska allows physician non-competes, but the permissible scope is relatively narrow.

A restriction generally needs to focus on protecting patient or customer relationships the physician actually developed rather than simply preventing the physician from competing throughout a large geographic area.

That can make broad restrictions particularly difficult to enforce.

Physicians should nevertheless not assume that the entire non-compete disappears simply because Nebraska applies a narrow standard.

Nevada Physician Non-Compete Law 🟡

Nevada generally permits physician non-competes.

The state has statutory requirements governing restrictive covenants generally, including protections for certain hourly employees and employees affected by reductions in force.

There is no broad physician-specific prohibition.

For most physicians, enforceability will depend on whether the restriction is reasonably necessary and appropriately limited.

New Hampshire Physician Non-Compete Law 🟢

New Hampshire prohibits physician non-competes.

A physician generally cannot be prevented from practicing medicine in a particular geographic area after leaving employment.

New Hampshire has also expanded similar protections to certain other healthcare professionals.

As always, restrictions involving confidentiality, patient information, or ownership transactions may still be treated differently.

New Jersey Physician Non-Compete Law 🔴

New Jersey generally allows physician non-competes.

However, courts consider the effect of the restriction on patients and the public, not simply the interests of the physician and employer.

That means access to care, physician availability, and continuity of treatment can become important when determining whether a restriction should be enforced.

New Jersey has considered broader non-compete legislation, but physician non-competes remain potentially enforceable as of September 2026.

New Mexico Physician Non-Compete Law 🟢

New Mexico generally prohibits non-competes for covered healthcare practitioners.

That protection has been in place longer than many of the newer physician non-compete laws appearing around the country.

The prohibition does not mean every post-employment obligation disappears. Confidentiality provisions and certain repayment requirements may remain enforceable.

But a traditional restriction preventing a covered healthcare practitioner from continuing to practice is generally prohibited.

New York Physician Non-Compete Law 🔴

New York continues to allow physician non-competes.

A broad statewide non-compete ban passed the legislature in 2023 but was vetoed, so New York continues to evaluate restrictions under its existing reasonableness framework.

For physicians, courts may also consider the effect of the restriction on the public and access to medical services.

So, while physician non-competes remain possible in New York, the specific duration, geography, specialty, and circumstances matter.

North Carolina Physician Non-Compete Law 🔴

North Carolina generally allows physician non-competes.

The restriction must still be reasonable and appropriately tailored to protect the employer’s legitimate interests.

North Carolina is also relatively unforgiving of poor drafting. Courts have limited ability to rewrite an overly broad restriction simply to make it enforceable.

For physicians, that means the exact wording of the non-compete can be particularly important.

North Dakota Physician Non-Compete Law 🟢

North Dakota broadly prohibits employee non-competes, including physician non-competes.

A physician generally cannot be prevented from continuing to practice after leaving an employer.

There are limited exceptions, particularly involving the sale of a business or certain ownership transactions.

For a traditional employed physician, however, North Dakota provides strong protection against non-competes.

Ohio Physician Non-Compete Law 🔴

Ohio generally allows physician non-competes.

Restrictions must be reasonable, and courts have the ability to modify a covenant that goes further than necessary.

There is currently no comprehensive physician-specific prohibition.

As a result, physicians should pay close attention to the duration, geographic radius, specialty restrictions, and circumstances in which the covenant applies.

Oklahoma Physician Non-Compete Law 🟢

Oklahoma generally prohibits traditional employee non-competes.

That means an employer usually cannot simply prevent a physician from practicing for a competitor after leaving.

However, Oklahoma does permit certain restrictions against directly soliciting established customers. In the healthcare setting, that can potentially affect how a departing physician communicates with former patients.

So, while the physician may be free to compete, the agreement’s patient non-solicitation language still deserves careful attention.

Oregon Physician Non-Compete Law 🟢

Oregon significantly expanded protection for physicians and certain other medical professionals in 2025.

Traditional non-competes involving covered physicians and other specified providers are now generally void, subject to exceptions.

Ownership is particularly important. Some exceptions depend on whether the provider owns an interest in the practice or is involved in a transaction involving that ownership.

For physicians working in MSO, private equity, or other complex practice structures, the corporate structure can therefore materially affect the analysis.

Pennsylvania Physician Non-Compete Law 🔵

Pennsylvania significantly restricted healthcare non-competes beginning January 1, 2025.

For covered healthcare practitioners, including physicians, CRNPs, physician assistants, and CRNAs, a non-compete generally cannot last longer than one year.

There is another important protection: if the employer “dismisses” the practitioner, the non-compete is unenforceable.

Unlike some states, Pennsylvania does not impose a specific mileage limit. So, while a one-year restriction may be permitted, the geographic scope still needs to be evaluated separately.

The law applies to agreements entered into on or after January 1, 2025. If you signed your agreement before that date, the older Pennsylvania rules may still apply.

Rhode Island Physician Non-Compete Law 🟢

Rhode Island generally prohibits physician non-competes.

An employer generally cannot prevent a physician from practicing medicine within a geographic area after the employment relationship ends.

There are exceptions, including certain restrictions associated with the purchase and sale of a physician practice.

For most employed physicians, however, a traditional post-employment non-compete is generally unenforceable.

South Carolina Physician Non-Compete Law 🔴

South Carolina generally allows physician non-competes.

The restriction must be reasonable and narrowly drafted.

South Carolina courts are also reluctant to rescue an employer from an overly broad covenant by rewriting it. As a result, the specific language used in the agreement can be critical.

There is no broad physician-specific statutory ban.

South Dakota Physician Non-Compete Law 🟢

South Dakota generally prohibits physician non-competes for agreements entered into on or after July 1, 2023.

The law applies broadly to physicians and numerous other licensed healthcare professionals. A covered agreement generally cannot restrict a physician from practicing or providing professional services within the physician’s scope of practice after the employment or other professional relationship ends.

There are important exceptions. Restrictions connected to the sale of a practice or ownership interest may still be permitted. Employers may also restrict a departing physician from actively soliciting current patients, subject to the geographic and time limitations permitted under South Dakota law.

Physicians with agreements entered into before July 1, 2023 should have those agreements reviewed separately because the statutory prohibition applies to agreements entered into on or after that date.

Tennessee Physician Non-Compete Law 🔵

Tennessee allows physician non-competes, but places statutory limits on them.

A physician restriction generally cannot last longer than two years and must comply with specific geographic limitations tied to where the physician practiced.

Tennessee law also permits certain alternative arrangements involving a contractual buyout of the restriction.

So, a physician non-compete remains possible, but an employer does not have unlimited discretion over how broadly it can be written.

Texas Physician Non-Compete Law 🔵

Texas significantly tightened its physician non-compete requirements for agreements entered into or renewed on or after September 1, 2025.

A physician non-compete generally cannot last longer than one year or extend more than five miles from the location where the physician primarily practiced.

The agreement must also contain a buyout provision, and the buyout cannot exceed the physician’s total annual salary and wages at the time employment ends.

There is another major protection: the non-compete is unenforceable if the physician is involuntarily terminated without good cause.

So, if you are reviewing a Texas physician agreement signed or renewed after September 1, 2025, one year, five miles, the buyout amount, and the termination language are the key provisions to check.

Utah Physician Non-Compete Law 🟢

Utah significantly restricted healthcare non-competes in 2026.

For covered healthcare workers entering into agreements after the law’s effective date, traditional employment non-competes are generally prohibited.

The protection extends beyond physicians to a broader group of licensed healthcare professionals.

There are exceptions, including certain ownership, business-sale, and severance arrangements, so the circumstances surrounding the restriction still matter.

Older agreements also need to be evaluated under the law in effect when they were entered.

Vermont Physician Non-Compete Law 🔴

Vermont does not have a comprehensive physician non-compete ban.

Physician restrictions may therefore remain enforceable if they are reasonable.

There is no simple statutory mileage or duration rule specifically protecting physicians, so enforceability depends heavily on the language and circumstances of the individual agreement.

Virginia Physician Non-Compete Law 🟢

Virginia significantly expanded healthcare non-compete protections effective July 1, 2026.

For new agreements involving covered licensed healthcare professionals, traditional non-competes are generally prohibited.

Virginia has also adopted additional protections affecting certain employees who are terminated without cause.

The timing is important. Physicians with agreements predating the 2026 changes should not automatically assume that the newer prohibition invalidates an existing restriction.

Washington Physician Non-Compete Law 🔵, Becoming 🟢 in 2027

Washington currently allows non-competes only under fairly restrictive conditions, including compensation thresholds and other statutory requirements.

But Washington has already enacted a much bigger change.

Beginning June 30, 2027, non-competes will be void and unenforceable in Washington regardless of when the agreement was originally signed.

That means the change reaches existing non-competes, not merely new agreements signed after the law takes effect.

Employers will also be required to provide notice to certain current and former workers that their non-competes are no longer enforceable.

For Washington physicians, there is therefore an unusual distinction between what the law allows today and what it will allow beginning June 30, 2027.

Washington, D.C. Physician Non-Compete Law 🔵

Washington, D.C. uses compensation thresholds rather than categorically prohibiting physician non-competes.

Employees below the applicable annual compensation threshold generally cannot be subject to a non-compete. A separate and higher threshold applies to qualifying medical specialists.

Physicians above the applicable threshold may still be subject to a non-compete, although the restriction must comply with D.C.’s statutory requirements.

Because the compensation thresholds are adjusted periodically, physicians should check the threshold applicable during the year the agreement is entered.

West Virginia Physician Non-Compete Law 🔵

West Virginia allows physician non-competes, but places significant limits on them.

A physician restriction generally cannot last longer than one year or extend more than thirty road miles from the physician’s primary place of practice.

How the employment relationship ends also matters. A physician non-compete is generally unenforceable if the employer terminates the physician.

Different rules may apply to physician owners and transactions involving the sale of a practice or ownership interest.

Wisconsin Physician Non-Compete Law 🟡

Wisconsin allows physician non-competes, but its restrictive covenant law is particularly strict about overbroad agreements.

A restriction must be reasonably necessary to protect the employer and appropriately limited in its scope.

Wisconsin courts generally cannot simply rewrite an unreasonable restriction to make it enforceable.

For physicians, that makes the actual wording of the agreement especially important.

Wyoming Physician Non-Compete Law 🟢

Wyoming significantly changed its non-compete law beginning July 1, 2025.

Under the newer law, a covenant restricting a physician’s right to practice medicine after the employment relationship ends is generally void.

There are exceptions, including certain business-sale and ownership situations.

The effective date also matters. Physicians with older agreements should not automatically assume that the newer law eliminates a restriction that predates the statutory change.

What This Means for Physicians

1. Do Not Assume Your Non-Compete Is Enforceable Just Because Your Signed It

This is probably the biggest takeaway.

Employment agreements regularly contain provisions that are partially or completely unenforceable under applicable state law.

And with the number of states changing their physician non-compete laws, language that may have been enforceable when an employer first developed its agreement may no longer comply with current law.

The fact that the restriction appears in your signed contract does not end the analysis.

2. Check When Your Signed the Agreement

The effective date of these laws matters.

Many of the newer physician protections apply only to agreements entered into, renewed, or amended after a particular date.

That means two physicians working for the same employer can have different rights even if their contracts contain identical language.

One may have signed before the law changed. The other may have signed afterward.

Always identify when the agreement was signed and whether it has subsequently been renewed or amended.

3. Look at What Happens if Your Employer Terminates You

In several states, the reason the employment relationship ends can determine whether the non-compete survives.

Pennsylvania, Texas, Connecticut, Indiana, West Virginia, and other states provide protections that can depend on how or why the physician’s employment ended.

This becomes especially important when negotiating termination provisions.

A physician should understand not only what the non-compete says, but also what events actually trigger it.

4. Ownership Can Change the Rules

An employed physician and a physician-owner may receive very different treatment.

Several states preserve non-competes in connection with the sale of a practice or an ownership interest even though they prohibit ordinary employee non-competes.

That distinction is increasingly important as physicians receive equity, participate in practice buy-ins, sell practices, or work within private equity and MSO structures.

If ownership is involved, do not assume the rules applicable to an ordinary physician employment agreement will apply.

5. No Non-Compete Does Not Mean No Restrictions

A state may prohibit your employer from stopping you from practicing medicine nearby and still permit other contractual protections.

Your agreement may contain:

• patient non-solicitation provisions;
• employee non-solicitation provisions;
• confidentiality and trade secret restrictions;
• repayment obligations for signing bonuses or relocation expenses;
• training-cost repayment provisions;
• notice requirements; and
• restrictions connected to the sale of a practice or ownership interest.

Those provisions can have a significant practical effect even when the traditional non-compete itself is unenforceable.

The Bottom Line

Physician non-compete law has changed dramatically over the past several years, and the trend has generally been toward greater restrictions on when healthcare employers can prevent physicians from continuing to practice.

But there is still no single national rule.

A physician in California may face a completely different set of restrictions from a physician in Florida. A physician in Pennsylvania who signed an agreement in 2026 may have different rights from a colleague who signed in 2024. And in states like Texas and West Virginia, how the employment relationship ends may determine whether the restriction can be enforced at all.

So, if you are reviewing an employment agreement or considering leaving your current practice, do not stop at the language of the non-compete itself.

Where you practice, when you signed, who employs you, whether you have an ownership interest, and how your employment ends can all change the answer.

Author: Adam J. Appleberry, Esq.

This article provides a general overview of physician restrictive covenant law as of September 2026 and is not legal advice. Non-compete laws continue to change quickly, and many of the laws discussed above contain exceptions, definitions, effective dates, and transition rules that may materially affect an individual agreement. The applicable law and specific agreement should be reviewed before making employment or practice decisions.

What Happened

Aetna has agreed to pay $117.7 million to resolve allegations that it violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage enrollees in order to inflate the risk-adjusted payments it received from CMS.

Under the Medicare Advantage program, CMS pays insurers a fixed monthly amount per enrollee that is adjusted based on how sick that enrollee is. The sicker the patient, the higher the payment. The government alleges that Aetna exploited this system in two ways:

1. For payment year 2015, Aetna ran an internal “chart review” program in which it hired diagnoses coders to review patient medical records. When those reviews identified diagnoses that could generate additional payments, Aetna submitted them to CMS. But when the same reviews showed that previously submitted codes were unsupported and Aetna was overpaid, Aetna did not delete those codes or return the money.
2. For payment years 2018 through 2023, Aetna submitted or failed to withdraw inaccurate diagnosis codes for morbid obesity for patients whose recorded BMI did not meet the clinical threshold for that diagnosis.

The Whistleblower

The morbid obesity portion of the case was brought by a former Aetna risk-adjustment coding auditor under the qui tam provisions of the False Claims Act. Qui tam allows private individuals with knowledge of fraud against the government to file suit on the government’s behalf and share in any recovery. The whistle blower in this case received approximately $2 million of the settlement.

This is a reminder that False Claims Act cases frequently originate from inside an organization from employees who see something, report it, and are entitled to a significant financial reward for doing so.

What this Means for Physicians and Medical Practices

While this case targeted a major insurer rather than a physician practice, there are important takeaways for anyone billing Medicare Advantage:

• Diagnosis coding must be supported by documentation. Whether you are submitting codes directly or working with a Medicare Advantage plan that conducts chart reviews, the diagnoses billed to CMS need to be accurate and clinically supported.
• Knowing about an error and failing to correct it creates liability. The False Claims Act does not require intentional fraud. Reckless disregard or deliberate ignorance of a known problem is enough.
• The government is actively looking. The DOJ-HHS Working Group has explicitly identified Medicare Advantage risk adjustment as a priority enforcement area, and it is using data analytics and AI to identify billing patterns that trigger investigations.

The Bigger Picture

The Aetna settlement is one of the largest False Claims Act healthcare recoveries announced so far in 2026, but it is unlikely to be the last. Medicare Advantage now covers more than half of all eligible Medicare beneficiaries and accounts for over $530 billion in annual federal spending. That level of spending, combined with a payment model that rewards higher diagnoses, makes it a natural enforcement target.

If you have questions about False Claims Act compliance, Medicare Advantage billing, or your practice’s exposure, feel free to reach out.

Artificial Intelligence continues to move quickly into the clinical workflow.

WVU Medicine recently announced that it is expanding its use of Abridge, an AI-powered transcription platform designed to generate clinical documentation during patient encounters. What began as a small pilot program in 2025 has now grown to more than 1,200 physicians, nurse practitioners, and physician assistants using the system across the organization, with more than 1,600 additional clinicians eligible to adopt the technology across WVU Medicine’s network of hospitals and outpatient facilities.

The platform works by recording the conversation between a clinician and a patient and then generating a draft clinical note that can be integrated directly into the Epic EHR system.

According to WVU Medicine leadership, clinicians using the platform save an average of approximately 11 minutes per day that would otherwise be spent converting rough notes into finalized documentation. Some clinicians have also reported lower stress levels and reduced burnout associated with the administrative burden of charting.

From an operational standpoint, tools like this have obvious appeal. Documentation requirements continue to grow, and anything that allows physicians to spend less time charting and more time interacting with patients is likely to gain traction across healthcare systems.

But while the technology may be new, the legal expectations surrounding physician responsibility remain unchanged.

AI Tools Do Not Replace Physician Responsibility

As I discussed in my recent article to recap my presentation at PBI’s Health Law Institute, artificial intelligence tools should be understood as assistive technologies, not decision-makers.

Even when AI is used to generate clinical notes or assist with documentation, the physician remains responsible for the accuracy of the medical record.

In practice, that means clinicians still need to carefully review AI-generated documentation before finalizing the chart. These systems can dramatically improve efficiency, but they are not perfect, and errors in the medical record can create both clinical and legal risk. Courts evaluating malpractice claims will ultimately focus on the physician’s conduct, not the performance of the software.

In other words, if an AI-generated note contains inaccurate information that contributes to an adverse outcome, the question will not be whether the software made a mistake. The question will be whether the physician exercised appropriate professional judgment in reviewing and approving the documentation.

Compliance and Privacy Still Apply

There are also important compliance considerations when AI tools are integrated into patient encounters.

Because platforms like Abridge process sensitive patient conversations, healthcare systems must ensure that appropriate HIPAA protections, Business Associate Agreements, and patient consent procedures are in place. WVU Medicine has indicated that patient consent is required before recording begins and that the transcriptions are protected under HIPAA in the same way as any other medical documentation.

These safeguards are essential as healthcare organizations increasingly rely on AI-powered platforms to assist with clinical operations.

The Bottom Line

AI documentation tools like Abridge may meaningfully reduce administrative burden and allow physicians to reclaim time during the clinical day. That is a positive development in a healthcare system where documentation requirements have steadily increased for years.

However, the presence of artificial intelligence does not change the fundamental legal expectations placed on physicians.

Technology can assist with documentation and workflow, but the physician ultimately remains responsible for the accuracy in the final chart and the clinical decisions reflected in it.

As these tools become more common, the most prudent approach for healthcare providers is to view AI as a powerful assistant, but not a substitute for careful review and professional judgment.

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Artificial Intelligence continues to move quickly into the clinical workflow.

WVU Medicine recently announced that it is expanding its use of Abridge, an AI-powered transcription platform designed to generate clinical documentation during patient encounters. What began as a small pilot program in 2025 has now grown to more than 1,200 physicians, nurse practitioners, and physician assistants using the system across the organization, with more than 1,600 additional clinicians eligible to adopt the technology across WVU Medicine’s network of hospitals and outpatient facilities.

The platform works by recording the conversation between a clinician and a patient and then generating a draft clinical note that can be integrated directly into the Epic EHR system.

According to WVU Medicine leadership, clinicians using the platform save an average of approximately 11 minutes per day that would otherwise be spent converting rough notes into finalized documentation. Some clinicians have also reported lower stress levels and reduced burnout associated with the administrative burden of charting.

From an operational standpoint, tools like this have obvious appeal. Documentation requirements continue to grow, and anything that allows physicians to spend less time charting and more time interacting with patients is likely to gain traction across healthcare systems.

But while the technology may be new, the legal expectations surrounding physician responsibility remain unchanged.

AI Tools Do Not Replace Physician Responsibility

As I discussed in my recent article to recap my presentation at PBI’s Health Law Institute, artificial intelligence tools should be understood as assistive technologies, not decision-makers.

Even when AI is used to generate clinical notes or assist with documentation, the physician remains responsible for the accuracy of the medical record.

In practice, that means clinicians still need to carefully review AI-generated documentation before finalizing the chart. These systems can dramatically improve efficiency, but they are not perfect, and errors in the medical record can create both clinical and legal risk. Courts evaluating malpractice claims will ultimately focus on the physician’s conduct, not the performance of the software.

In other words, if an AI-generated note contains inaccurate information that contributes to an adverse outcome, the question will not be whether the software made a mistake. The question will be whether the physician exercised appropriate professional judgment in reviewing and approving the documentation.

Compliance and Privacy Still Apply

There are also important compliance considerations when AI tools are integrated into patient encounters.

Because platforms like Abridge process sensitive patient conversations, healthcare systems must ensure that appropriate HIPAA protections, Business Associate Agreements, and patient consent procedures are in place. WVU Medicine has indicated that patient consent is required before recording begins and that the transcriptions are protected under HIPAA in the same way as any other medical documentation.

These safeguards are essential as healthcare organizations increasingly rely on AI-powered platforms to assist with clinical operations.

The Bottom Line

AI documentation tools like Abridge may meaningfully reduce administrative burden and allow physicians to reclaim time during the clinical day. That is a positive development in a healthcare system where documentation requirements have steadily increased for years.

However, the presence of artificial intelligence does not change the fundamental legal expectations placed on physicians.

Technology can assist with documentation and workflow, but the physician ultimately remains responsible for the accuracy in the final chart and the clinical decisions reflected in it.

As these tools become more common, the most prudent approach for healthcare providers is to view AI as a powerful assistant, but not a substitute for careful review and professional judgment.

Healthcare law is entering a period of rapid change. Telehealth, artificial intelligence, and remote care models are reshaping how physicians deliver care, while legislatures, regulators, and courts are working to adapt older legal frameworks to new technologies. Although the tools are changing quickly, the core legal issues remain familiar: licensure, standard of care, supervision, privacy, and contractual risk.

Below is a recap of the key issues I discussed.

1. Telehealth Is No Longer a Temporary Workaround

Pennsylvania’s Telemedicine Act (Act 42 of 2024) helped move telehealth from a pandemic-era necessity into a more permanent statutory framework. For policies filed on or after March 31, 2025, insurers, Medicaid, and CHIP must cover medically necessary services delivered through telemedicine when those same services would be covered in person.

But the most important legal point is this: the standard of care in a telehealth encounter is the same as it is in person. Telehealth does not reduce a physician’s duty of care. If the technology does not allow for a clinically meaningful evaluation, the physician may need to direct the patient to an in-person visit.

2. Patient Location Still Matters for Licensure

One of the most common telehealth traps is licensure. In most cases, a physician is considered to be practicing medicine where the patient is physically located at the time of the encounter, not where the physician is sitting.

Pennsylvania’s full implementation of the Interstate Medical Licensure Compact (IMLC) in 2025 made multi-state licensure easier, but it did not create a national license. Physicians still need to ensure they are properly licensed in the state where the patient is located. That makes something as simple as confirming patient location at the start of a telehealth visit an important compliance step.

3. Multi-State Practice Also Creates Multi-State Risk

The IMLC expands opportunity, but it also expands exposure. A disciplinary action in a physician’s principal state can trigger reciprocal consequences in other Compact states. For physicians building multi-state telehealth practices, administrative diligence becomes critically important.

4. Remote Practice Does Not Eliminate Supervision Requirements

Telehealth also complicates supervision of Advanced Practice Providers (APP) such as physician assistants and nurse practitioners. Written supervisory or collaborative agreements still matter, but regulators will focus on whether supervision is meaningful in practice. If an APP encounters a complex case during a telehealth visit, there must be a reliable way to escalate that issue to the supervising physician in real time.

5. Artificial Intelligence Does Not Replace Clinical Judgment

AI tools are increasingly being used for documentation, triage, analytics, and decision support. But under Pennsylvania’s existing liability framework, the physician remains responsible for the final clinical decision.

That means AI should be treated as a decision-support tool, not a decision-maker. If a physician follows an AI-generated recommendation that later proves wrong, the legal analysis is likely to focus on whether the physician exercised independent professional judgment. Likewise, ignoring widely adopted AI tools may eventually raise different standard-of-care questions. In both situations, documentation will matter.

6. AI Raises Significant HIPAA and Data Governance Issues

As practices use more AI-driven vendors and digital tools, patient data often passes through multiple third parties. That creates growing compliance concerns around:

• Business Associate Agreements;

• Downstream subcontractors;

• Breach notification responsibilities;

• Secondary use of clinical data; and

• Vendor access to protected health information.

In my view, traditional BAAs are no longer enough in many AI arrangements. Physicians and healthcare organizations should understand how vendors use, store, and potentially train on clinical data before those tools are integrated into practice workflows.

7. Pennsylvania’s Fair Contracting For Health Care Practitioners Act Changed the Non-Compete Landscape

I also discussed Pennsylvania’s Fair Contracting for Health Care Practitioners Act (Act 74 of 2024), which significantly changed how non-competes operate for physicians and some APPs, as previously discussed on this blog (previous article here).

For any physician employment agreement signed after January 1, 2025, non-compete restrictions are limited to one year, and the statute significantly restricts enforcement when the practitioner is terminated by the employer. Telehealth adds another layer of complexity, because traditional radius-based restrictions can be difficult to apply in a remote practice model. As more care moves online, employers may increasingly rely on narrower patient non-solicitation provisions instead of broad geographic restrictions.

Final Takeaway

The central theme of the presentation was simple: technology is changing physician practice quickly, but the legal principles governing physician responsibility remain familiar.

Telehealth, AI, and digital platforms may create new factual scenarios, but they do not eliminate the importance of:

• Licensure;

• Documentation;

• Supervision;

• Privacy compliance; and

• Independent clinical judgment.

For physicians, healthcare organizations, and the attorneys who advise them, the challenge is not just understanding the new technology. It is understanding how longstanding legal rules apply when that technology becomes part of everyday care delivery.

The announcement is a signal of Medicare’s continued push toward value-based care models, in which physician reimbursement is increasingly tied to quality metrics and cost management rather than just the volume of services provided.

Overview of the Ambulatory Specialty Model

The ASM is designed to improve the prevention and management of chronic diseases in outpatient settings, with an initial focus on heart failure and lower back pain. CMS has indicated that the program is intended to reduce avoidable hospitalizations, improve care coordination, and lower overall Medicare spending.

Heart failure represents a particularly significant target for cost containment efforts. Estimates suggest that heart failure care costs the U.S. healthcare system approximately $179.5 billion annually, making it one of the most expensive chronic conditions treated within the Medicare population.

Under the ASM, certain specialists who frequently treat Medicare patients with these conditions will be required to participate in the program if they meet specified eligibility criteria.

Who Will Be Required to Participate

CMS has released a list identifying approximately 2,600 cardiologists who will be required to participate in the heart failure portion of the ASM. See the full list here.

Physicians were selected based on several criteria, including:

• Billing under the Medicare Physician Fee Schedule
• Practicing in CMS-designated geographic regions
• Having a specialty designation in general cardiology
• Historically treating at least 20 heart failure episodes per year

CMS will evaluate eligibility using data from two years prior to a performance year. For example, CMS will use 2025 claims data to determine eligibility for the 2027 performance year.

The program will also include more than 4,000 physicians treating lower back pain, reflecting CMS’s broader effort to target high-cost chronic conditions.

Payment Adjustments Under the Model

Beginning in 2028, participating physicians will have their Medicare Part B payments adjusted based on their performance within the model.

For the first two payment years (2028 and 2029), payment adjustments will range from –9% to +9%, with the potential for larger adjustments in later years.

Notably, these adjustments apply at the individual physician level and affect all of the physician’s Medicare Part B claims, not just claims associated with heart failure treatment.

How Performance Will Be Measured

The ASM builds upon the existing Merit-based Incentive Payment System (MIPS) framework and evaluates physicians across several performance domains, including:

• Quality of care
• Care improvement activities
• Cost of care
• Interoperability and data sharing

A significant portion of a physician’s performance score (reportedly 50%) will be tied to an episode-based cost measure related to heart failure treatment.

Questions and Concerns Raised by Professional Societies

Several cardiology organizations have raised questions about the design and implementation of the program.

The American College of Cardiology (ACC) has submitted comments to CMS identifying potential operational challenges, including concerns about the program’s focus on individual physician performance rather than team-based care models that are common in cardiology.

The American Society of Nuclear Cardiology (ASNC) has also encouraged members to review the CMS participant list and report whether they were included, noting that the organization is still working to understand the program’s full impact on its membership.

Professional organizations have also requested additional transparency from CMS regarding the data that will be used to determine physician performance under the model.

What This Means for Physicians

Although the ASM initially targets cardiologists and physicians treating lower back pain, the model reflects a broader policy trend within Medicare.

Over the past decade, CMS has steadily expanded value-based payment models, shifting reimbursement toward programs that emphasize cost control, prevention, and measurable outcomes.

Physicians should expect that similar programs will continue to expand across specialties as CMS pursues its long-term goal of transitioning a larger share of Medicare spending into value-based payment arrangements.

For physicians identified as ASM participants, reviewing the program requirements and monitoring future CMS guidance will be important as implementation approaches.

Healthcare regulations are constantly evolving, and staying informed is critical for physicians, practice managers, and healthcare professionals.

In addition to in-depth articles here on Med Law Blog, Tucker Arensberg healthcare attorney Adam Appleberry provides regular legal updates and practical guidance on social media:

• Instagram: @the.doctors.lawyer
• TikTok: @thedoctorslawyer

Through short, focused videos and posts, Adam addresses real-world issues facing medical practices, including compliance, reimbursement, credentialing, peer review, HIPAA, telehealth, and risk management. His goal is to make healthcare law understandable and accessible for busy providers.

If you prefer quick, practical insights alongside our longer-form legal analysis, we encourage you to follow along on Instagram and TikTok for ongoing updates tailored specifically to healthcare professionals.

The underlying rules are not new. However, the compliance deadline is approaching, and for many organizations, the required updates will touch more than just the notice itself.

Why This Update Is Required

In February 2024, the U.S. Department of Health and Human Services (“HHS”) finalized revisions to 42 C.F.R. Part 2, aligning portions of the SUD confidentiality regulations with the HIPAA Privacy Rule pursuant to the CARES Act.

While the rule expanded certain permitted uses and disclosures of SUD records for treatment, payment, and health care operations, it retained heightened confidentiality protections and introduced additional notice obligations. As part of that framework, covered entities that handle Part 2 records must ensure their NPP accurately reflects these requirements.

The deadline to comply with the notice-related provisions is February 16, 2026.

Who This Applies To

The NPP update requirement applies to any HIPAA covered entity that creates, receives, maintains, or transmits SUD records protected by Part 2, even if the entity is not a SUD treatment program.

This can include:

• Health care providers
• Group health plans
• Employer-sponsored health plans
• Health plans and insurers
• Care coordination and integrated care arrangements
• Digital health platforms and vendors operating within covered entity workflows

Importantly, some organizations may be subject to Part 2 notice obligations simply because SUD records pass through their systems, even if SUD treatment is not their primary function.

That said, not all group health plans are required to issue their own NPP. Fully insured plans may generally rely on their insurer’s NPP if they do not receive PHI beyond enrollment data or summary health information. Plans that receive more extensive PHI remain responsible for maintaining and updating their own notice.

What the Updated NPP Must Address

An updated NPP must accurately describe how SUD records are used and disclosed under Part 2 and must reflect the more stringent protections that apply to those records.

At a high level, the revised NPP should address:

• Uses and disclosures of SUD records, including when written patient consent is required
• Patient rights specific to SUD information
• The covered entity’s legal duties with respect to Part 2 records
• A clear statement that SUD records and related testimony cannot be used or disclosed in civil, criminal, administrative, or legislative proceedings against the patient, absent a written consent or qualifying court order
• Fundraising opt-out rights, if applicable

Part 2 patient notice requirements may be incorporated into a HIPAA NPP, provided all required disclosures are included.

Practical Compliance Considerations

For many covered entities, this update should be treated as more than a document refresh.

As the deadline approaches, organizations should consider:

• Whether their current NPP accurately reflects Part 2 handling in practice
• How SUD records move through internal systems and workflows
• Whether vendors or business associates handle Part 2 records
• Whether business associate agreements need to be updated to address Part 2 obligations
• Whether workforce training or subpoena response procedures need adjustment

While updating the NPP alone does not automatically require changes to business associate agreements, BAAs should be reviewed if vendors create, receive, or maintain Part 2 records on the covered entity’s behalf.

Bottom Line

This is not a new requirement, but February 16 is a firm compliance date. Covered entities that handle SUD records should confirm now whether Part 2 applies to their operations and ensure their NPP updates are underway and that policies, vendor relationships, and operational practices are all aligned.