Oregon SB 951: The State Law the Federal CPOM Bill Copies, and What It Means for Your MSO

When people talk about a federal ban on the corporate practice of medicine, they are usually describing Oregon. SB 951 is the state law the Stop Corporate Takeovers of Physicians Act was written from, and it is the most detailed attempt any state has made to regulate the relationship between a management services organization and the professional entity that treats patients.

It is worth understanding on its own terms, not just as a preview. Oregon clinics are living under it now, and the questions it forces, who owns the practice, who decides, and who can replace the physician, are the same questions every PC/MSO structure should be able to answer in any state.

Why Oregon Passed It

Oregon has had a corporate practice of medicine doctrine for decades: the entity delivering medical care is supposed to be owned and clinically controlled by licensed professionals, so that medical decisions are made by people answerable to a license rather than a balance sheet. The doctrine had a gap, and it is the same gap the federal bill targets. A "friendly" physician could own the professional entity on paper while a non-physician company ran it through the management agreement.

The political trigger was the acquisition of a large Eugene medical group by a national insurer-owned company, after which many of its physicians left. Lawmakers responded with a bill aimed at the structure that made that kind of control possible rather than at any single company.

What SB 951 Actually Prohibits

The law speaks of a "professional medical entity," the PC or similar entity that provides care, and a management services organization that provides it business services under a written contract for pay. As summarized by the major healthcare law firms that have analyzed it, its core limits are these.

• No majority ownership by the MSO side: the MSO's owners, officers, managers and employees may not own or control a majority interest in a professional medical entity that contracts with the MSO. HB 3410 extended the reach to MSO contractors.
• No overlapping roles: people on the MSO side generally may not serve as directors, officers or employees of the contracted practice, and the practice's owners generally may not own, direct or work for the MSO. Exceptions exist, including narrow ones for small physician stakeholders paid at market rates, so the details matter.
• No control over who owns the practice: an MSO may not control or restrict the transfer of the practice's ownership. Agreements that let a management company swap out the physician owner are limited to narrow triggers such as loss of license, exclusion from federal health programs, a felony indictment, death or disability, or breach of the management contract.
• No de facto control of operations or care: an MSO may not hold ultimate authority over hiring and firing, schedules and compensation, clinical staffing, diagnostic coding, pricing, billing and collection policies, or payer contracts. It may assist with those functions, but not in a way that amounts to control or affects clinical decisions and quality of care.
• Restrictive covenants: noncompetes between an MSO and a licensed clinician that restrict practicing medicine or nursing are void unless they fit narrow exceptions, and nondisclosure and nondisparagement agreements with MSOs and hospitals are void with limited exceptions. Counsel disagree on some of the thresholds, so check the enacted text before relying on any one number.

What It Still Allows

This is the part that gets lost. SB 951 does not outlaw the MSO model. The law expressly leaves room for an MSO to lease or sell the practice the right to use assets on arm's-length terms, to provide back-office support such as accounting, personnel administration, facilities and compliance, and to advise on value-based contracts, payer arrangements and vendor contracting.

In other words, an MSO can run the business around a practice. It cannot be the practice. The line is whether the physician-owned entity keeps real authority over its own assets, operations and clinical decisions.

As counsel have summarized it, the law does not set a cap or formula for management fees. What it does restrict is control over the things a fee structure usually rides on, such as pricing, billing policy and clinician pay. A percentage-of-collections arrangement is not named as illegal, but it is hard to square with an MSO that is supposed to have no say over pricing and billing, which is why we treat a flat fair-market-value fee as the safer design.

Dates, Scope and Exemptions

• June 9, 2025: SB 951 was signed. Its noncompete, nondisclosure and nondisparagement rules apply to agreements entered into or renewed after that date. Some sources describe other provisions as effective on signing, others as January 1, 2026, so verify against the enrolled text.
• July 24, 2025: HB 3410 was signed, amending the MSO provisions. It broadened some exceptions and transfer-restriction triggers without changing the core ban on MSO control.
• January 1, 2026: the MSO ownership and control restrictions apply to MSOs and professional medical entities formed on or after June 9, 2025, and to practices with ownership transfers after that date.
• January 1, 2029: the deadline for arrangements that existed before June 9, 2025 and have not been sold or transferred since.
• Who is covered: medicine and nursing. Dental and veterinary practices are outside it, and hospitals, certain behavioral health providers and other listed entities are exempt.
• Telemedicine: a narrow carve-out exists for telemedicine companies with no clinical location in Oregon, though it was narrowed by HB 3410 and counsel read how far it reaches differently. Do not treat it as a general exemption for virtual care.

How It Is Enforced

According to law-firm summaries, a violation is treated as an unlawful trade practice under Oregon law. That allows the Oregon Attorney General to seek civil penalties and injunctions, and it gives private parties, including the physicians and practices on the receiving end, a right to sue for actual and punitive damages, equitable relief and attorneys' fees. We have not found guidance spelling out penalty amounts, and no major rulemaking has surfaced, so the practical enforcement picture is still thin.

The private right of action is the part to take seriously. A physician who owns a practice on paper and later finds the management company controls it, or tries to replace them, is exactly the plaintiff the law was built for.

The First Real Test: Eugene Emergency Physicians v. PeaceHealth

In early 2026 PeaceHealth announced it would not renew its decades-long emergency department staffing contract with Eugene Emergency Physicians and would move to a national staffing company's model instead. The physician group sued, arguing the replacement practice was physician-owned in name only and that the outside company's role in hiring and clinical operations violated SB 951. The case moved to federal court, and the judge heard several days of testimony on whether the new practice was truly physician-owned and physician-run.

There was no final written ruling. Press reports describe the judge saying there was ample evidence the arrangement arguably violated the law, and PeaceHealth then reached a preliminary agreement to keep working with the original physician group while the details were finalized. Read that as an early signal about how a court looks past ownership paperwork to who actually decides, not as settled precedent. The defendants disputed the claims, and the final terms were not public when we checked.

How It Connects to the Federal Bill

The Stop Corporate Takeovers of Physicians Act, introduced in September 2026, borrows Oregon's architecture: licensee ownership of practices, hard limits on MSO control, restrictions on transfer agreements and noncompetes, and a private right of action. It goes further in places, including a broader sweep with no telemedicine carve-out as introduced, and it has not advanced past introduction. See our breakdown of that bill for the federal specifics. The practical point is that Oregon is the working example of how the same rules read in practice.

What This Means for a Clinic or Med Spa Structure

If you operate in Oregon, you are already in scope or on a clock. If you operate elsewhere, SB 951 is still the clearest checklist available of what a regulator, a plaintiff's attorney or a future buyer's diligence team will look for. The questions are practical.

• Does a licensed physician actually own the PC, and is that physician genuinely engaged in the practice rather than spread across dozens of entities?
• Is there any agreement that lets the management company replace the physician owner, restrict a sale of the practice, or finance the purchase of it?
• Who has final say over hiring and firing, pricing, billing policy, coding, clinical staffing and payer contracts? If the honest answer is the MSO, that is the pattern the law targets.
• Does patient revenue land in the PC's own bank account, with the MSO paid a defined fee for defined services?
• Is the management fee fixed and defensible, or does it sweep a percentage of collections?
• Did the physician review the management agreement with counsel they chose themselves?
• Do any clinician agreements include noncompete, nondisclosure or nondisparagement terms that the law now voids?

Where MedGrid Fits

We did not build MedGrid's MSO program around SB 951, but the structure lines up with what it asks for. Every PC we help form is physician-owned, with one physician per PC and one PC per location or state, so the physician is a real owner rather than a name spread across many filings. We connect clinics with a physician licensed in their state, and we do not build structures that depend on being able to swap that physician out. Patient revenue lands in the PC's own account, the management fee is a flat fair-market-value amount rather than a percentage of collections, and the practice reviews its agreements with its own counsel. The medical director agreement, management services agreement and consulting agreement are separate documents that say who does what.

That is a description of our design, not a legal opinion on yours. If you are in Oregon, or you want a structural review before a regulator or a buyer asks for one, that is the conversation to have with us. See also our explainer on what corporate practice of medicine actually restricts, and why a PC rather than a PLLC is the entity the doctrine calls for.

Frequently Asked Questions

• Does SB 951 ban management services organizations?: No. It limits what an MSO can own and control. Business services such as accounting, facilities, personnel administration, compliance and advice on payer and vendor contracting remain permitted, as long as the MSO does not exercise de facto control over the practice or clinical decisions.
• Does it apply to clinics outside Oregon?: It governs Oregon professional medical entities and the MSOs that serve them. Whether an out-of-state or telemedicine company is reached depends on its Oregon presence and on how the exemptions apply, so get Oregon counsel to read your specific facts.
• When do the restrictions apply to existing arrangements?: Arrangements formed or transferred on or after June 9, 2025 were subject to the MSO restrictions on January 1, 2026. Arrangements that existed before that date and have not been sold or transferred have until January 1, 2029.
• Are noncompetes banned?: Noncompetes that restrict a clinician from practicing medicine or nursing are void by default, with narrow exceptions such as certain ownership and recruitment-investment situations. The thresholds are described differently across law-firm summaries, so check the enacted text.
• Who can enforce it?: Counsel describe enforcement through the Oregon Attorney General and through private lawsuits for damages and attorneys' fees. Penalty amounts and agency guidance have not been widely reported.
• Is the federal bill the same as SB 951?: It is modeled on it but not identical. The federal bill has not advanced beyond introduction, so SB 951 is the version that is actually law today.

This article is general information summarizing public analysis of Oregon SB 951 and HB 3410, not legal advice. Law-firm summaries differ on several details, the statutes may be amended or interpreted by courts and agencies, and your obligations depend on your facts. Review the enacted text and consult qualified Oregon healthcare counsel about your specific structure.