South Carolina subcommittee hears divergent views on Senate Bill S.46 to curb physician noncompetes

Senate Bill S.46, which would create a new chapter in Title 41 limiting enforcement of physician noncompete provisions and requiring patient-notification rules when a physician leaves an employer, drew broad testimony Tuesday before the Labor and Occupation Subcommittee of the Senate Labor, Commerce and Industry Committee.

The bill would void contract provisions that restrict a physician from treating patients after leaving an employer, impose a 30‑day notification requirement about an expected separation and how patients may obtain their records, allow limited recovery by employers for certain expenses when a physician departs, and direct the South Carolina Board of Medical Examiners to adopt implementing regulations. "The bill creates a new chapter within Title 41 titled health care contracts," said Rebecca, the staff presenter, summarizing the measure for the committee.

Supporters told the subcommittee the measure protects patients and physician autonomy. Cleve Hamm, immediate past president of the Charleston County Medical Society and district 14 trustee on the board of the South Carolina Medical Association, said the bill advances four principles: preservation of the physician‑patient relationship, physician autonomy, patient choice and health‑care quality. "Physicians can practice where and how they feel is best for the care of their patients," Hamm said, adding that noncompetes can "directly interfere with the patient's right to choose a physician." Fiona Robar, a Charleston dermatologist, described losing contact with long‑term patients after leaving a system and called that experience tantamount to abandonment: "These patients I've seen for some of them up to 7 years... I couldn't help them. That was such a hard conversation to have."

Physicians representing independent and small practices also argued noncompetes hinder workforce flexibility. Dr. Jessica Mendelson, owner of New South Family Medicine in Fort Mill, said restrictive covenants sometimes bar physicians from practicing any capacity within a radius (she cited examples of 15 miles) and leave small practices unable to hire. "My colleagues are burnout. They're tired. They want to provide comprehensive medical care that puts patients first, and they wanna explore career options that would allow them to provide care in their own communities. They're held prisoner, quite honestly," Mendelson said.

Hospital systems and payer representatives urged caution and asked for drafting changes to avoid unintended consequences. Jim Ritchie, executive director of the South Carolina Alliance of Health Plans, told the committee he did not oppose the bill's goals but warned its current language is broad and could be read to constrain payer‑provider arrangements such as prior authorization, step therapy and population‑health programs. "To the extent this bill spills over and deals with relationships between payers and providers, we have great concerns," Ritchie said.

Ryan Bernal, speaking for hospital members, said many hospitals use noncompetes and worry the bill's corporate‑practice language could sweep more broadly than intended. "As it relates to the noncompetes, about 75% of our hospitals use noncompetes in varying degrees," Bernal said, and he asked the committee for an opportunity to propose compromise language. Andrea Brisbane, general counsel for University Medical Associates at the Medical University of South Carolina, said UMA uses noncompetes with buyout provisions that, in her view, provide flexibility to recoup recruitment costs while allowing physicians to leave.

Hospital witnesses pressed the panel on how the bill treats recovery of recruitment and related expenses. Dr. Richard Alexander of McLeod Health, who works on physician recruitment, described long recruitment timelines and costs, including sign‑on bonuses, student‑loan assistance and relocation. He asked the committee to ensure language would allow recovery of documented recruiting expenses when needed to sustain services, especially in rural communities.

Committee members signaled sympathy for the patient‑choice argument while pressing witnesses on the business consequences. Senators present repeatedly separated the policy question of abolishing or limiting physician noncompetes from the distinct payment and recruitment questions about who bears cost when a physician moves. After testimony, a committee member moved to carry the bill over for further work; the motion was seconded and approved by voice vote. The chair said the bill will be re‑set for a future meeting so stakeholders and staff can draft amendment language.

Why it matters: S.46 targets a common contract tool used by hospitals and large employers that supporters say can fragment care and limit patients' ability to follow a physician. Opponents worry that sweeping language could disrupt payer‑provider contracts or make it harder for hospitals to recruit and sustain services in low‑volume or rural areas. The final text and any carve‑outs for recoverable expenses, sale‑of‑practice exceptions and the administrative rules the Board of Medical Examiners will write are likely to determine the bill's effect.

What to watch next: The subcommittee carried S.46 over for further drafting. Expected next steps are amendment language from hospital and payer groups to narrow corporate‑practice and payer‑interaction concerns, and staff work on the Board of Medical Examiners' regulatory triggers and the bill's definitions and recovery provisions.