Can a New Bill Stop Private Equity From Buying Medical Practices, and How Does That Affect Direct Primary Care?

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I know this is really premature, but it is definitely interesting. If you have ever read this blog, you would know that we do not love private equity firms buying or creating DPC practices. Since they want 10x on their return, they dilute the concept, hire 90% nondoctors to run it, and create the same garbage we all ran from to do Direct Primary Care.

Now the government has come in with a solution. Maybe. Their success rate is worse than a blindfolded dart player riding a rollercoaster, but who am I to say? Since the government usually screws things up, I am not counting on this bill passing or even working, but here is a summary:

The Stop Corporate Takeovers of Physicians Act was introduced in September 2026 by congressional Democrats to federally ban private equity firms, insurers, and for-profit corporations from owning or controlling medical practices. It aims to reverse the trend of corporate consolidation affecting over 80% of U.S. doctors.

📌 Core Provisions

  • Prohibits for-profit corporate ownership
    • Bans private equity firm control
    • Targets major health insurance companies 
  • Closes management services organization (MSO) loopholes
    • Eliminates “friendly physician” control structures
    • Restricts de facto administrative governance  
  • Protects clinical independence
    • Mandates clinician majority equity ownership
    • Bans corporate interference in medical decisions 
  • Restricts restrictive covenants
    • Outlaws predatory noncompete agreements
    • Prohibits nondisclosure and nondisparagement clauses 

⚠️ Outlook and Challenges

  • Faces steep legislative hurdles
    • Unlikely to pass the current Congress
    • Lacks necessary Republican support 
  • Reflects growing state-level momentum
    • Modeled after strict Oregon regulations
    • Mirrors oversight laws in 11 states 

So, is this good? I don’t know. Here is what Dr. Glaucomflecken (Dr. Will Flanary, a practicing ophthalmologist, comedian, and social media dude) posted:

This is the federal version of legislation we have in Oregon. The law was tested earlier this year, when Peace Health attempted to replace their local, independent EM group with ApolloMD, a national corporate management group based in Atlanta. The EM group sued and won. The law works.

This is a way to protect independent physicians and preserve physician autonomy. Is the law perfect? No. One of the criticisms I keep seeing is that it doesn’t address non-profit hospital direct ownership of physicians, and that is true.

The Oregon law originally included hospitals, but the American Hospital Association lobby went nuclear and received an exemption for non-profit hospitals, much to everybody’s dismay.

One thing that is unique to the Oregon law and, now, this federal legislation is that it targets the MSO-PC model that so many hospital systems use to supplant independent physician practices. This is not just about private equity. This legislation is fighting a practice model that gives non-physician, corporate influence over clinical decision making.

We have dozens, if not hundreds, of examples of hospitals canceling contracts with high functioning, local, independent physician practices, and handing those contracts to these national corporate groups, who then staff hospital departments with temporary physician, NPs, and PAs with no institutional knowledge and no investment in the community.

Even though this legislation may not apply to hospitals directly employing physicians, it does give independent physician practices more leverage with the hospitals they serve. This bill also gets rid of non disparagement agreements and non competes.

If passed, this would be a huge win for independent physicians and communities who get to keep their local doctors.

Once again, I hate the VCs and their Private Equity firms gobbling up doctors and then replacing them. They are trying to do it with Direct Primary Care because we are so hot right now.

Sure, I would LOVE for hospitals not to be able to buy doctors’ practices.. That could force physicians to consider Direct Care (DPC or DSC) in some manner. That being said, the American Hospital Association lobby has already infiltrated the Oregon situation and excluded non-profit hospitals, which almost all big hospitals are. You don’t think they would alter this national bill as well?

I hope and pray that DPC docs remain independent. Let’s not go back to being shackled. And when it is time to sell, don’t get greedy and sell to a private equity firm. Sell it to a young doctor and allow him or her to prosper. Easier said than done, I know. But if you are successful in DPC with a full practice over a twenty-year career, you can put enough away in retirement that you won’t need PE money. I did it.

Keep the mission of DPC. Make it part of the fabric of your practice. Think about those patients who will get terrible care if you cash out to a corporation that will replace you with a gaggle of midlevels, most of whom are poorly trained.

Ultimately, this bill will fail, and the future of Direct Primary Care falls on the consciences of those doctors practicing right now.

So, what are you going to do?

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About Douglas Farrago, MD

Dr. Farrago is a retired family physician based in Forest, Virginia. Since 2021, he has run DPCnews.com, a leading resource for the Direct Primary Care (DPC) movement. He is the author of three best-selling books on Direct Primary Care: The Official Guide to Starting Your Own Direct Primary Care Practice The Direct Primary Care Doctor’s Daily Motivational Journal Slowing the Churn in Direct Primary Care (While Also Keeping Your Sanity) In 2016, Dr. Farrago conceived the idea for the Direct Primary Care Alliance and co-founded the organization alongside other pioneering DPC physicians. He is widely recognized as a leading expert in the DPC model and frequently lectures to medical students, residents, and practicing physicians on how to successfully start and run their own DPC practices. Dr. Farrago sold his Direct Primary Care practice in October 2020.