Federal and state lawmakers are intensifying scrutiny of private equity ownership of physician practices and management services organization (MSO) arrangements amid growing concerns about corporate influence over medical decision-making. The proposed Stop Corporate Takeovers of Physicians Act seeks to restrict corporate ownership and control of medical practices, building on recent state legislation and enforcement actions targeting corporate practice of medicine (CPOM) violations. As regulatory oversight increases, physician practices, MSOs, and private equity investors must carefully evaluate their ownership structures, management agreements, and safeguards for independent clinical judgment.
In an article by Part B News, Frier Levitt Co-Managing Partner Daniel Frier discussed the economic pressures driving physicians toward alternative practice models, including hospital employment and private equity investment.
“The practice of medicine has evolved dramatically over the last 10 years but the law has not kept up with the actual business and clinical changes.”
Declining reimbursement relative to inflation has made it increasingly difficult for independent practices to survive. Looking ahead, Dan recommended structuring MSO arrangements to preserve physician autonomy and minimize disruption from potential regulatory changes. He also encouraged private equity-owned MSOs to consider public benefit corporation structures that prioritize patient care while allowing investors to remain profitable.
Co-Managing Partner
