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Committee advances bill banning physician noncompete clauses after amendment; proponents say it will help rural access
Summary
The Senate Health Committee advanced Senate Bill 475, which would prohibit new noncompete agreements for physicians; sponsors and supporters argued the change will improve physician mobility and rural access, while some members urged caution about effects on small hospitals.
The Senate Health Committee voted to advance an amended version of Senate Bill 475, a measure that would bar employers and physicians from entering into noncompete agreements in new contracts.
Sponsor Senator Bush said the prohibition aims to ease workforce mobility for physicians and address shortages in rural counties. "We have severe doctor shortage," Senator Bush said, citing cases in which noncompetes prevented physicians from continuing to practice in their communities.
Supporters included Secretary Gloria Sachdev of the Indiana Family and Health Services, who said the administration supports ending physician noncompetes and suggested stronger mandatory language for the statute. "Noncompetes are, by their term, anti competitive. And we need more competition," Secretary Sachdev told the committee.
Advocates for access and medical societies also testified in favor. Matt Bell of Hoosiers for Affordable Health Care and Dr. Elizabeth Struble of the Indiana State Medical Association said the change could help retain and recruit physicians and preserve continuity of care for patients.
Several witnesses and committee members pressed for clarifications. Hospital attorneys and the Indiana Chamber raised concerns about interfering with freedom of contract and potential impacts on rural hospitals that invest in specialized services. Tim Kennedy of the Indiana Hospital Association said the committee should clarify how the bill treats existing agreements (original contracts vs. amendments), the scope of the ban (medical services only vs. administrative roles), and remedies for employers that invested in training or relocation inducements.
The committee adopted an amendment by consent removing an earlier provision that would have codified a Stark-like provision (the sponsor had shelved that language). After discussion the committee approved the amended bill by roll call, 10 to 2.
Votes at a glance: Senate Bill 475 — Committee outcome: moved to floor (do pass recommendation); committee vote: 10 yes, 2 no.
Sponsor and supporters said they will continue to work on technical clarifications and consider expanding the protection to other licensed clinicians in future legislation.
