Healthcare Consolidation and Competition State Legislation

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Healthcare practitioner noncompetes restricted

Pennsylvania limited the enforceability of noncompete agreements for healthcare practitioners and established patient notification requirements when practitioners depart.

• Pennsylvania HB 1633 voids noncompete covenants entered into with healthcare practitioners—including medical doctors, doctors of osteopathy, certified registered nurse practitioners, certified registered nurse anesthetists and physician assistants—unless the covenant lasts no more than one year, and the practitioner was not dismissed by the employer. The statute permits enforcement of noncompetes in connection with business sales, mergers or change-of-control transactions where the practitioner receives an ownership interest. Under HB 1633, employers are also prohibited from recovering relocation, training and patient-base establishment expenses from practitioners if the employer terminates the healthcare practitioner. HB 1633 allows employers to recover reasonable relocation, training and patient-base establishment expenses from practitioners who voluntarily separate, amortized over up to five years. It also requires employers to notify patients within 90 days of a practitioner’s departure—where the patient had an ongoing outpatient relationship of two or more years—of the departure, the option to transfer health records and the ability to continue care with the employer.

Psychiatric facility capacity expanded; physician noncompete void

Arkansas enacted legislation expanding psychiatric residential treatment facility capacity and eliminating physician noncompete restrictions. Together, these measures aim to increase provider mobility and facility availability in the state.

• Arkansas HB 1653 expands allowable bed capacity for psychiatric residential treatment facilities by recognizing certain licensed and constructed beds previously excluded under the state moratorium.
• Arkansas SB 139 voids all noncompete agreements that restrict a physician's right to practice within their scope of practice, promoting competition in the healthcare market.

Healthcare transactions subject to reporting; private equity control of practices restricted

California expanded regulatory oversight of healthcare transactions and imposed limits on private equity and hedge fund involvement in physician and dental practices. The legislation targets consolidation and management influence over clinical decision-making.

• California AB 1415 updates the state’s Health Care Quality and Affordability Act by imposing new reporting requirements and directing research on the impact of management service organizations. The statute also regulates consolidation in the state with new notice requirements for transactions between healthcare entities or management service organizations.
• California SB 351 prohibits private equity groups and hedge funds involved in physician or dental practices from interfering with clinical judgment or coding and billing decisions and voids contracts permitting such interference.

Hospital ownership transfers in bankruptcy subject to CON review

Connecticut expanded CON oversight for hospitals undergoing bankruptcy-related ownership changes, increasing regulatory review of distressed healthcare transactions.

• Connecticut HB 7067 creates a CON application process for all ownership transfers involving hospitals that have filed for bankruptcy protection.

Hospital facility fees disclosed to patients in advance

Illinois enacted patient-focused transparency measures addressing hospital facility fees, requiring advance notice policies.

• Illinois HB 1431 aims to regulate pricing and increase price transparency by requiring hospitals to create patient notification policies to inform patients when they may be subject to facility fees during their treatment.

Healthcare ownership disclosed; physician noncompetes restricted

Indiana expanded reporting and enforcement authority over healthcare ownership and transactions and broadened statutory limits on physician noncompete agreements.

• Indiana HB 1666 requires healthcare entities to report ownership information to state regulators and empowers the attorney general to investigate market concentration and issue civil investigative demands.
• Indiana SB 119 permits the attorney general to consult with health department officials on certificate of public advantage applications.
• Indiana SB 475 expands the definitions of regulated noncompete and nonsolicitation agreements affecting physicians that penalize a physician’s ability to practice medicine after leaving an employment arrangement.

Birth centers and pediatric facilities operate without CON review

Iowa reduced regulatory barriers for certain pediatric and maternity care providers by expanding CON exemptions.

• Iowa HB 887 exempts healthcare providers from CON requirements when creating, relocating, expanding or offering new services in birth centers.
• Iowa HB 919 exempts certain children's specialty hospitals from CON requirements and establishes licensing standards for such facilities.
• Iowa H933 exempts pediatric palliative care centers from CON requirements.

Provider scope expanded; broad CON exemptions adopted

Kentucky enacted wide-ranging reforms expanding provider scope of practice and exempting numerous facilities and services from CON and licensure requirements.

• Kentucky HB 305 expands credentialing scope for physician assistants, dietitians and nutritionists, removes certain healthcare training scholarship restrictions and exempts numerous healthcare facilities, services and transactions from CON and licensure requirements.

• Kentucky HB 90 establishes freestanding birthing centers with licensure standards set by the Cabinet for Health and Family Services, exempts them from CON requirements and creates requirements for medical directors and written patient transfer agreements.

Physician noncompetes capped by contract term and geography

Louisiana restricted physician noncompete agreements by capping initial contract terms and limiting post-termination geographic restrictions, with exemptions for rural healthcare providers 

• Louisiana SB 165 limits noncompete agreements for physicians by capping initial contract terms at three years for primary care physicians and five years for other physicians, after which subsequent contracts may not include noncompete provisions. If the physician terminates prior to the initial term, the employer may restrict the physician from practicing in the parish (Louisiana’s equivalent of a county) where the physician primarily practiced and up to two neighboring parishes for no more than two years. The statute exempts physicians employed by rural hospitals or healthcare centers that qualify as rural facilities under Louisiana or federal law.

Healthcare transactions reviewed; private equity hospital ownership barred

Maine increased oversight of healthcare transactions and imposed a moratorium on private equity and REIT ownership of hospitals.

• Maine HB 1036 establishes a commission to evaluate the scope of regulatory review over healthcare transactions, including reviewing potential changes to CON laws and overseeing ownership changes.

• Maine SB 416 imposes a moratorium prohibiting private equity and real estate investment trusts from owning or operating hospitals.

Healthcare professional noncompetes limited

Maryland voided noncompete provisions for lower-compensated healthcare professionals providing direct patient care and limited such provisions for higher earners.

• Maryland HB 1388 voids noncompete and conflict-of-interest provisions for healthcare professionals who hold a state license to practice a health occupation (such as physicians, nurses, dentists and other regulated providers), provide direct patient care and earn $350,000 or less in total annual compensation. For healthcare professionals earning more than $350,000 who meet the licensing and direct patient care requirements, the statute limits noncompete provisions to one year from the last day of employment and restricts the geographic scope to 10 miles from the primary place of employment. Employers must also notify patients, upon request, of the new practice location of a departing healthcare professional. Additionally, the law requires the Maryland Health Care Commission to study the effect of private equity firms on the state’s healthcare market, including impacts on hospital consolidations, physician practice acquisitions and the ability of nonprofit hospitals to maintain access to care. This law is less recent that those of other states, having gone into effect in 2024.

Nonprofit nursing facility sales disclosed to regulators

Minnesota enhanced oversight of ownership changes involving nonprofit long-term care facilities transitioning to for-profit control.

• Minnesota HB 3 requires advance notice and ownership disclosures to state regulators before nonprofit nursing homes or assisted living facilities transfer ownership or control to for-profit entities.

Healthcare noncompetes prohibited; CON process modernized

Montana eliminated post-employment noncompetes for healthcare providers and updated CON application and notice procedures.

• Montana HB 620 prohibits post-employment noncompete contracts for licensed healthcare providers in any geographic area and for any period after termination, with exceptions for education expense and tuition repayment.
• Montana SB 88 updates the CON process by requiring monthly online publication of letters of intent and updating application, review and notice procedures.

Noncompetes for advanced practice registered nurses are unenforceable going forward

New Hampshire restricted enforcement of noncompete agreements against advanced practice registered nurses.

• New Hampshire SB 172 prohibits enforcement of noncompete clauses against advanced practice registered nurses that restrict practice in any geographic area post-employment, while preserving other contract terms.

Mental health capacity and CON rules studied statewide

New Jersey mandated a comprehensive review of mental health treatment capacity and CON requirements.

• New Jersey SB 4263 requires a state study to report on mental health treatment placement, bed availability, temporary licensing and CON requirements to enhance public tracking of available mental health and substance use treatment beds.

Healthcare mergers reviewed; transparency and protections expanded

New Mexico strengthened state review of healthcare mergers and ownership changes while increasing transparency and worker protections.

• New Mexico HB 586 increases state oversight of hospital and healthcare provider mergers, acquisitions and control changes. The statute requires Health Care Authority review of such transactions, enhances public transparency and provides whistleblower protections for workers.

Public university hospitals operate outside CON review

Oklahoma clarified the regulatory framework governing its university hospitals—publicly owned teaching hospitals supporting the University of Oklahoma—by exempting them from CON review and imposing trauma care requirements.

• Oklahoma SB 873 relates to the operations of university hospitals, which are publicly owned teaching hospitals operated by a state-created authority to support the University of Oklahoma’s academic medical and public health mission. The statute exempts expansions, additions and changes to these hospitals from CON requirements and requires the hospitals to operate a public Level I trauma center that meets applicable national accreditation standards. The law also updates statutory provisions governing the University Hospitals Authority and its facilities.

Physician practices insulated from private-equity-backed management services organizations control

Oregon adopted a restrictive framework to limit private equity-backed management services organizations involvement in physician practices.

• Oregon SB 951 prohibits management services organizations, including those backed by private equity, from owning or controlling physician practices and from exerting operational control over employment decisions, clinical staffing, patient care schedules, diagnostic coding, clinical standards, pricing and payor contract negotiations. The statute renders noncompete, nondisparagement and nondisclosure agreements between management services organizations and medical professionals void and unenforceable, except under narrow statutory exceptions.

Insurer incentives governed by fiduciary standards

Texas regulated insurer financial incentives that influence patient care decisions, imposing fiduciary obligations and quality safeguards.

• Texas SB 926 amends the Texas Insurance Code to regulate how health benefit plan issuers, including HMOs and insurers, structure financial incentives that steer patients toward specific providers. The statute imposes a fiduciary duty to act for the primary benefit of enrollees, prohibits incentives based solely on cost or that induce use of materially lower-quality providers, and bars incentives favoring insurer-controlled physicians. The statute also establishes requirements for physician ranking standards developed by nationally recognized organizations.

Healthcare services platforms regulated; worker noncompetes prohibited

Utah established a registration program for healthcare services platforms and prohibited such platforms from requiring noncompete agreements with healthcare workers or from restricting workers from accepting shifts through competing platforms.

• Utah SB 228 establishes a registration program for healthcare services platforms—electronic systems through which healthcare workers accept shifts as independent contractors at healthcare facilities. The statute prohibits registered platforms from requiring healthcare workers to enter into noncompete agreements, accepting fees or payments for a worker's acceptance of employment with a healthcare provider or facility, or restricting workers from finding or accepting shifts through other platforms or with other employers. Platforms must also verify that workers meet applicable licensing, training and continuing education standards, and must maintain liability insurance.

Higher CON thresholds apply to healthcare projects

Vermont raised CON thresholds and expanded exemptions, particularly for publicly funded healthcare projects.

• Vermont HB 96 raises monetary thresholds triggering CON requirements for healthcare construction projects, major diagnostic or therapeutic equipment purchases and new healthcare services. The statute also increases thresholds for conceptual development phase certificates and exempts state-owned, state-operated and state-funded healthcare projects from CON requirements.

CON exemptions broadened; expedited review expanded; noncompetes limited

Virginia enacted multiple reforms expanding CON exemptions, accelerating review in underserved areas and broadening noncompete prohibitions.

• Virginia HB 1552 and SB 1177 allow critical access hospitals to utilize an average of up to 10 swing beds per day without obtaining a certificate of public need. 

• Virginia HB 2119 and SB 1203 direct the State Health Services Plan Task Force to develop recommendations for establishing an expedited application and review process for projects requiring a certificate of public need in underserved areas. The expedited process would apply to projects located in areas meeting at least two of the following criteria: (1) lack of a hospital or healthcare provider within a specified radius based on population density, (2) fewer than one primary care physician per 3,500 residents or (3) an annual poverty rate of at least 20 percent. 
• Virginia SB 1064 expands expedited certificate of public need review procedures to include bed relocations, conversions, additions and establishment of new psychiatric facilities by existing medical care facilities.
• Virginia SB 1218 expands the definition of “low-wage employee” for purposes of the prohibition on covenants not to compete to include employees entitled to overtime compensation under the federal Fair Labor Standards Act, regardless of their average weekly earnings, as well as independent contractors compensated at an hourly rate below the state median wage.

Healthcare ownership tracked; state Hart-Scott-Rodino Act filings required

Washington expanded transparency into healthcare ownership and adopted state-level premerger notification requirements.

• HB 1686 directs state agencies to develop a plan for creating a comprehensive, interactive registry of healthcare entities tracking facilities, providers, systems, carriers and benefit managers, including ownership structures, affiliations and private equity investments. 
• HB 1755 exempts certain elective cardiac procedures from CON requirements.
• SB 5122 enacts the Uniform Antitrust Premerger Notification Act, requiring persons filing federal Hart-Scott-Rodino Act premerger notifications to contemporaneously file a copy of the premerger form with the Washington attorney general if they have their principal place of business in Washington, have annual net sales in the state of at least 20 percent of the federal filing threshold, or are a healthcare provider conducting business in the state. 

Physician noncompetes unenforceable post-employment

Wyoming eliminated physician noncompete restrictions while preserving patient-notification rights.

• SB 107 voids noncompete provisions in employment, partnership or corporate agreements that restrict a physician's right to practice medicine upon termination, while preserving other enforceable provisions. The statute permits physicians to disclose their continuing practice and new contact information to patients with rare disorders as defined by the National Organization for Rare Disorders, shielding both the physician and former employer from liability.

Hart-Scott-Rodino Act filings reported to the state; patient-communication restraints prohibited

Colorado enhanced state oversight of healthcare transactions and limited contractual restraints on provider-patient communication. The laws focus on transparency and continuity of patient care.

• Colorado SB 126 requires all parties filing Hart-Scott-Rodino Act reports with the federal government to send copies to the state attorney general.
• Colorado SB 83 prohibits contracts that restrict healthcare professionals from informing patients when they move practices or from disclosing new professional contact information.

Telehealth and select providers operate outside CON review

The District of Columbia narrowed the scope of its CON regime by exempting certain provider categories, particularly in telehealth and behavioral health.

• District of Columbia SB 25 exempts digital-only telehealth platforms and providers, federally qualified health centers, outpatient or residential behavioral health services and primary care, dental care and specialty care providers from CON requirements.