You may never open a clinic in Oregon. Read this anyway, because Oregon has written down what regulators elsewhere have been circling for a decade, and the drafting is going to be copied.
On June 9, 2025, Governor Tina Kotek signed Senate Bill 951, enacting what healthcare lawyers across the country immediately described as the most restrictive corporate practice of medicine law in the United States. It does not merely say a non-physician cannot own a practice. It says specific things about what a management services organization may and may not do, and about who may sit on both sides of the arrangement.
What SB 951 actually restricts
Two mechanisms do most of the work.
The dual-role ban. A shareholder of the professional corporation is limited in holding ownership, management or employment positions in the MSO that supports it. The classic friendly-PC structure often relies on exactly that overlap — the “friendly” physician is friendly because they are connected to the management side. Oregon has attacked the connection directly rather than trying to police its effects.
Control limits. The statute restricts an MSO’s influence over clinical decisions and over a defined set of business decisions at the practice. This goes beyond the familiar “no interference with medical judgment” language into operational territory that most management agreements assume is theirs.
The combination is what makes it strict. Many states prohibit the outcome; Oregon legislates against the levers.
The restrictive covenant provisions took effect immediately
One part of the bill did not wait for a phase-in. Provisions banning certain restrictive covenants — non-compete, non-disclosure and non-disparagement clauses in the relevant relationships — became effective on signature, June 9, 2025.
That is worth noting on its own. Non-disparagement clauses binding clinicians have been quietly standard in management agreements, and a state has now treated them as part of the control problem rather than as ordinary commercial terms.
Two compliance dates, and they are not the same
| Entity | MSO ownership and control restrictions apply from |
|---|---|
| MSOs and professional medical entities formed in Oregon on or after June 9, 2025 | January 1, 2026 |
| Entities that already existed before that date | January 1, 2029 |
| Restrictive covenant provisions (all) | June 9, 2025 |
The three-year runway for existing entities is generous and easy to misread as three years of doing nothing. In practice it is the window in which to restructure, and anyone transacting on an Oregon practice in the interim is buying a structure with a known expiry date — which is precisely how it will be priced.
Why this matters if you never touch Oregon
Because it is not an outlier any more. It is the leading edge of a pattern.
- California SB 351, signed October 2025 and effective January 1, 2026, bars private equity groups and management entities from controlling or interfering with clinical decisions, with Attorney General enforcement.
- New York has for years prohibited fee splitting between a professional entity and a non-licensee, which makes a percentage-based management fee unlawful rather than merely aggressive.
- New Jersey reached a similar destination through litigation, holding that promoting a sham practice structure can support insurance fraud liability.
Four different routes — statute, statute, statute and case law — converging on the same principle: the physician who owns the practice has to actually own the practice.
Provisions to check in your own agreement
| Provision | Question to ask |
|---|---|
| Share transfer or succession rights | Can the manager remove the physician owner unilaterally? |
| Fee formula | Is it fixed and fair market, or a share of clinical revenue? |
| Clinical policy authority | Who approves protocols, the menu and staffing ratios? |
| Personnel decisions | Who hires, fires and disciplines clinical staff? |
| Overlapping roles | Does the PC shareholder also hold a role in the MSO? |
| Restrictive covenants | Are clinicians bound by non-compete or non-disparagement terms? |
| Term and termination | Can the practice exit, and on what notice? |
If the honest answers make you uncomfortable, that discomfort is the finding. You do not need an Oregon address for it to matter.
What we tell clients
Structures should be built to survive the next statute, not just the current one. In practice that means fixed fees rather than percentages, real physician control over clinical policy and personnel, no overlapping roles that exist purely to neutralise the physician’s ownership, and a management agreement that a regulator could read end to end without finding a clause whose only purpose is to take back what the ownership documents just gave.
That is a slightly less profitable structure on paper. It is also the one that still exists in 2029.
See what is included, or start with what a friendly PC-MSO structure is meant to look like.
Related reading
Frequently asked questions
What is Oregon SB 951?
A 2025 Oregon law tightening the corporate practice of medicine by restricting management services organization ownership overlaps and control over clinical and certain business decisions at supported medical practices.
When does Oregon SB 951 take effect?
Restrictive covenant provisions applied from June 9, 2025. MSO ownership and control restrictions apply from January 1, 2026 for entities formed on or after June 9, 2025, and from January 1, 2029 for entities that existed before then.
Does SB 951 ban management services organizations?
No. It restricts specific ownership overlaps and specific forms of control. An MSO providing genuine administrative services to a genuinely physician-controlled practice remains the model.
Does this affect med spas?
It affects the entities delivering medical services and the companies managing them, which includes aesthetic and wellness practices structured that way.
Should I restructure if I am not in Oregon?
Not because of Oregon alone. But if your agreement fails the questions above, it is likely also exposed under California’s SB 351 or New York’s fee-splitting rules, and that is worth knowing now rather than during diligence.
General information about Oregon SB 951 and management services organization structure, not legal advice. Implementation guidance is still developing and effective dates vary by entity. Confirm your position with healthcare counsel.