Senate committee hears bill to limit corporate control of medical practices; debate centers on MSOs, noncompetes and patient access

Senate Committee on Health Care Chair Patterson opened a public hearing March 4 on Senate Bill 951, a proposal that would tighten Oregon’s corporate practice of medicine rules by defining management service organizations (MSOs), restricting when nonlicensed entities can exercise control over medical practices, and limiting certain restrictive contracts between providers and other entities.

The measure, sponsored in the House by Representative Ben Bowman, was presented to the committee with three posted amendments (dash-2, dash-3 and dash-5). Under the introduced measure, the MSO provisions would take effect Jan. 1, 2029; the remainder of the bill would be effective on passage.

Supporters told the committee the bill is designed to preserve clinician control of medical decisions and protect patient care. "Medical decisions should be made by licensed providers who have an ethical duty to their patients and not by corporations or private equity firms who have a fiduciary duty to their shareholders," Representative Ben Bowman said. Bowman described MSOs as third-party vendors that can be used to exert de facto control when investors rely on contractual arrangements and so-called "captive" physicians.

Representative Cyrus Javedi, who identified himself as both a legislator and a health-care provider, said the bill does not ban corporate investment or MSOs but would prevent corporate entities from exerting clinical control. "This bill doesn't eliminate corporate involvement. ... It simply ensures that corporate entities cannot exert control over clinical decision making," Javedi said, citing examples he said led to clinic closures and longer patient travel for care.

What the bill would change

Key provisions presented by staff and sponsors define "management services organization," define "ownership and control," and narrow the circumstances in which a licensee who is an officer of a professional medical entity may also be an employee of or participate in an…