The Stop Corporate Takeovers of Physicians Act: What It Would Mean for Digital Health and Telemedicine

On September 16, 2026, Senators Elizabeth Warren, Ron Wyden, and Jeff Merkley, along with Representatives Val Hoyle, Alexandria Ocasio-Cortez, and Suhas Subramanyam, introduced the Stop Corporate Takeovers of Physicians Act of 2026. Most of the coverage has called it a private equity bill, but the text reaches much further than private equity. It would create the first federal corporate practice of medicine (CPOM) law, and it would apply to most of the PC/MSO structures that digital health and telemedicine companies use today.

What the bill does

The core rule is simple. Any partnership or corporate entity that is not majority-owned and controlled by one or more licensees could not own or control a medical practice (in whole or in part), employ or contract for a licensee's professional services, or practice medicine. To count as majority-owned and controlled, licensees must hold a majority of the ownership interest and also make up a majority of the governing body.

The bill defines a licensee as a physician, or an advanced practice provider such as a physician assistant or nurse practitioner, who is authorized under state law to diagnose and treat patients. Nonprofit and public providers, hospitals, hospital-affiliated clinics, critical access hospitals, and rural emergency hospitals are exempt from the ownership rule.

The bill is modeled on Oregon's SB 951, which Oregon enacted in 2025, and it does not preempt any state law that is equal or stricter. If it passed, companies would still have to follow every state CPOM law on top of the federal one.

Private equity is not defined in the bill

The phrase "private equity" appears in the press materials, but the bill never defines it, because the bill does not care where the money comes from. The test is whether the owner holds a clinical license. A private equity fund, a venture capital fund, an angel investor, and a non-clinician founder who is self-funding a company with their own money are all treated the same way.

Under the federal text, a non-licensee could still hold a minority interest in a practice, as long as licensees hold the majority and control the board. In practice that opening is small, because most CPOM states already prohibit non-licensees from owning any part of a professional entity, and the bill leaves those stricter state rules in place.

What would change for PC/MSO structures

For most digital health companies, the bill would take the strictest state CPOM rules, which today look most like Oregon and California, and make them the national baseline. The MSO, and anyone who owns, works for, or contracts with the MSO, could not:

Control or restrict the sale or transfer of the practice's shares or assets.
Issue ownership in a practice or set up a practice the MSO intends to contract with.
Own any interest in the practice, serve as an officer, director, or employee of it, or finance the purchase of practice shares.
Advertise the practice's services under any name other than the practice's own name.
Hold final decision-making authority over hiring, licensee compensation and schedules, staffing levels, visit length, revenue disbursement, required credentials, revenue targets, coding, clinical policies, billing policies, pricing, or payer contracting.

Management agreements would only be allowed if the practice negotiated them at arm's length with its own independent counsel and advisors, with fees at fair market value as determined by the FTC. Any agreement that breaks these rules would be void.

A few other provisions apply directly to telehealth:

Configuring the medical record in a way that limits the clinical orders available to a licensee counts as interference with clinical judgment. That language reads directly onto protocol-driven and asynchronous platforms.
Non-competes, NDAs, and non-disparagement agreements with licensees would be void, except a non-compete with a licensee who owns 25 percent or more of the practice.

Enforcement would run through the FTC, state attorneys general, and a private right of action with treble damages. Courts that find a violation must order the violator to stop and, where it applies, divest, along with disgorgement of revenue earned during the violation. Violators could also be excluded from federal health programs. The rules would take effect one year after enactment, with no grandfathering for existing arrangements.

The three changes that matter most

Licensee owners who are present and involved in care

Most national telehealth companies operate through one physician, or a small group of physicians, who owns the professional entity in every state the company serves. That physician is licensed in each state but usually does not live there, and often sees few or no patients through the practices they own. The ownership role is oversight: they hold the shares, sign the contracts, and supervise the clinical program, while employed and contracted clinicians deliver the care.

The bill would require licensee owners to be licensed and present in a state where the practice serves patients, and to be substantially engaged in delivering medical care. Neither "present" nor "substantially engaged" is defined. Read narrowly, a physician who owns practices across many states but is not treating patients through them would no longer qualify as an owner.

That would gut the telemedicine infrastructure as it exists today. The multi-state PC/MSO model depends on a small number of physicians being able to own practices across the country without being full-time clinicians in each one. Unless regulators read those terms broadly, companies would need owners who actively practice in each practice, or a much larger group of physician owners, and the cost and complexity of a national launch would change completely.

Stock transfer restriction agreements

Nearly every PC/MSO structure includes a stock transfer restriction agreement, which gives the MSO the right to require the physician owner to transfer the practice to a new owner if the physician leaves, loses their license, or breaches the agreement. It is how investors protect the business they have funded, and it is one of the first documents any buyer or lender looks for in diligence.

The bill would ban the MSO from controlling or restricting the transfer of practice shares, and it would prohibit the MSO from letting anyone other than a licensee control that transfer. Without that agreement, the MSO's protection comes down to the management agreement and the working relationship with the physician owner. That changes how these companies are valued and how much outside capital they can attract.

Advertising under the medical group's name

Most patients do not realize that the large consumer telehealth brands are not medical groups. Hims & Hers, for example, describes itself as a platform that connects people to licensed providers, and its terms state that it is not a healthcare provider. The care itself is furnished through affiliated medical groups, and that is the standard model across digital health.

The bill would bar an MSO from advertising the practice's services under a name that is not the practice's name. For companies whose brand is the MSO's brand, that would mean marketing under the medical group's name, licensing the brand to the practice in a way that survives the rest of the MSO restrictions, or restructuring entirely.

If your structure is built correctly

The clinical-control provisions in this bill describe how a well-run PC/MSO already operates. In the practices I work with, the physicians are involved: they review and approve protocols, meet with the providers they oversee, sign the right contracts, understand the scope of services, and own every clinical decision. For those companies, the provisions on visit times, diagnoses, referrals, and clinical policies would not change anything about how care is delivered.

Where a compliant structure would still need work is in the documents and the business terms: who owns each state's practice, the stock transfer restriction agreement, how the management fee is set and documented, who has final authority over pricing and payer contracting, and whose name is on the marketing. Those are real changes, but they are structural, not clinical.

Why I don't expect it to pass

All of the sponsors are Democrats, no Republicans have signed on, and the bill has been referred to committee. Sidley and Foley both concluded it is unlikely to move in the current Republican-majority Congress, and because the 119th Congress ends in January 2027, the bill would need to be reintroduced to go anywhere.

Physicians are also split on it. Several told Becker's that the hospital exemptions would push physicians toward hospital employment rather than independence, and that the bill does nothing about the reimbursement pressure that drives independent practices to look for outside capital in the first place.

What it would cost the industry if it did pass

The biggest effect would be on growth. Building a new care model, whether that is a multi-state telehealth practice, a membership program, or a new specialty offering, takes capital that most clinicians do not have on their own. If the only people who can own and control a practice are licensees, and the MSO cannot fund practice equity or protect its investment, then new models would depend on clinicians who can self-fund or raise small minority investments, and a lot of what has been built in digital health over the last decade would not have been possible.

The exemptions would also move market share toward hospital systems, which would face none of these restrictions. And because the bill has no grandfathering and requires divestiture and disgorgement for violations, existing companies would have one year to restructure or unwind arrangements that were lawful when they were signed.

What to do now

Even if this bill goes nowhere, the states are already enforcing the same ideas. Oregon's SB 951 is in effect, California's SB 351 took effect in January 2026, and the California Attorney General announced a $4.5 million settlement with a digital health company in June 2026 over its friendly PC arrangement. It is worth reviewing your structure as if a regulator were reading it:

Does your management services agreement give the MSO final say over any of the items listed above?
How is your stock transfer restriction agreement written, and what would you rely on without it?
Is your management fee set at fair market value, and can you document how you got there?
Are you marketing care under a brand name that is not the medical group's name?
Is your PC owner involved in the clinical program, or is their name only on the paperwork?

Camino helps digital health companies and independent practices build and operate PC/MSO structures where the physicians are involved in the clinical program and the documents match how the business actually runs. If you want a second set of eyes on your structure, reach out through caminostrategygroup.com.

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Disclaimer: This post is for general informational purposes only and is not legal advice. Camino Strategy Group is not a law firm, and laws vary by state and change often, so consult a licensed attorney before making decisions about your business.