Pennsylvania enacts Fair Contracting Act to limit health care non compete agreements

In a recent government meeting, discussions centered on the evolving landscape of non-compete agreements for healthcare practitioners across various states, highlighting significant legislative changes aimed at improving access to healthcare services. The meeting underscored the impact of these agreements on patient care and the competitive dynamics within the healthcare industry.

One of the most notable developments discussed was Pennsylvania's enactment of the Fair Contracting for Health Care Practitioners Act, effective January 1, 2025. This legislation aims to dismantle barriers posed by non-compete agreements that have historically restricted healthcare practitioners from moving between employers, particularly within consolidated hospital systems. By declaring such agreements void and unenforceable after the effective date, the law seeks to enhance competition and ultimately improve patient access to care. Key provisions include a one-year limit on non-compete durations and requirements for notifying patients about a practitioner's departure, ensuring continuity of care.

The meeting also touched on similar legislative efforts in other states. New Mexico has a less detailed statute that enforces non-compete provisions only upon termination of employment, while Kentucky restricts these agreements solely for temporary direct care staff. Connecticut's recent law places the burden of proof on employers seeking to enforce non-compete agreements, requiring them to demonstrate a legitimate business interest and imposing strict limits on duration and geographic scope.

Additionally, Illinois and Iowa have introduced specific protections for healthcare professionals serving veterans and first responders, making certain non-compete agreements unenforceable to prevent barriers to essential mental health services. Louisiana and Maryland have also implemented significant restrictions, with Louisiana's law expiring non-compete agreements for primary care physicians after three years and Maryland voiding such agreements for lower-earning healthcare professionals.

These legislative changes reflect a growing recognition of the need to balance the interests of healthcare providers with the imperative of ensuring patient access to care. As states continue to revise their approaches to non-compete agreements, the implications for healthcare delivery and practitioner mobility will be closely monitored. The meeting concluded with a call for ongoing dialogue and potential collaboration among states to further refine these regulations and enhance healthcare accessibility for all communities.