A bill introduced in the North Carolina Senate in late March 2025 has the potential to bring major changes to corporate practice of medicine rules in the state, most significantly for physician-owned practices. The bill aims to "restore the supremacy of medical providers' professional judgement" and to prohibit the corporate practice of medicine. In its current form, Senate Bill 570 would impact physician-owned practices whose physician owners also have ownership in a management services organization (MSO).
The bill appears to target a popular structure used by private equity and similar investors in physician-owned medical practices in the state. If passed, the bill would prohibit a physician owner in a medical practice from also holding ownership interests with non-physician investors in an MSO formed to provide non-clinical services such as billing, marketing, staffing, and administrative support to the physician practice. The bill is designed to address concerns that a physician’s judgement could be impacted by the MSO’s ownership of, or control over, the medical practice’s non-provider staff, equipment, supplies, real estate, and non-clinical operations.
If passed, this bill would require restructuring of many current arrangements in North Carolina and would shift the landscape of available capital to physician-owned medical practices in the future. As currently drafted, the bill does not have a grace period to allow physicians to bring non-compliant arrangements into compliance with the law.
The bill is in its early stages, and we are keeping an eye on how it will progress through the legislature.
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