If your med spa runs through a management services organization (MSO) with a physician-owned practice entity, a new federal bill would put that structure under direct federal rules for the first time. The Stop Corporate Takeovers of Physicians Act, introduced in September 2026 by Senate and House Democrats, borrows heavily from Oregon’s SB 951 and would create a national corporate practice of medicine (CPOM) standard. It is unlikely to pass this year. It still deserves your attention now, because it shows where some regulators and plaintiffs’ lawyers want this industry to go.
What the bill would do
The core rule is simple: an entity not majority-owned and controlled by licensed clinicians could not own or control a medical practice, employ or contract with clinicians, or practice medicine (bill § 2(a)(1)). “Majority-owned and controlled” means clinicians hold a majority of the equity and make up a majority of the governing body (§ 2(a)(2)).
Two details matter for med spas. First, “licensee” covers physicians plus nurse practitioners and physician assistants authorized under state law to diagnose and treat (§ 2(d)(3)). An NP-owned practice would count as clinician-owned. Second, the exceptions cover nonprofits, public providers, and hospitals and their affiliated clinics (§ 2(a)(3)). A typical for-profit med spa fits none of them.
The operative rules would take effect one year after enactment (§ 2(f)).
Why the med spa MSO model is in the crosshairs
Most multi-location med spas use a “friendly physician” setup: a clinician owns the practice entity on paper, and a lay-owned MSO runs everything else. The bill attacks that model at the level of actual control, not just formal ownership.
An MSO, or its owners, officers and employees, could not hold equity in the practice, finance its acquisition, control transfers of practice shares or assets, or work for or help manage the practice (§ 2(b)(2)(A)(i)-(v)). That last point would end the common arrangement where the medical director also sits on the MSO side.
The MSO also could not hold ultimate decision-making authority over a long list of areas (§ 2(b)(2)(A)(viii)). For a med spa, the ones that bite hardest are:
- Pricing. Treatment and membership pricing set by the MSO would be off limits.
- Revenue. The MSO could not control disbursement of practice revenue or set revenue targets or incentives for providers.
- People. Hiring, firing, schedules, compensation and staffing levels would belong to the practice.
- Clinical and billing policy. Clinical standards, credential requirements, coding and billing policies would stay with the practice.
MSO agreements would need to be negotiated at arm’s length, through counsel and advisors the practice picks without MSO involvement, and pay only fair market value as set by the FTC (§ 2(b)(2)(A)(vi)). Any agreement that violates these limits would be void (§ 2(b)(2)(B)).
One provision the commentary has mostly skipped could hit med spa brands directly. An MSO could not advertise a practice’s services under any name other than the practice’s own (§ 2(b)(2)(A)(vii)). Many med spas market under a brand owned by the MSO, so this alone would force a rethink.
What it means for owners, medical directors and injectors
The owner of the practice entity would have to be licensed and present in a state where the practice treats patients, and substantially engaged in delivering care (§ 2(c)). An out-of-state physician who owns dozens of practice entities and rarely sees patients would not qualify.
Noncompetes with physicians, NPs and PAs would be void unless the clinician owns at least 25 percent of the practice (§ 2(b)(1)(A)). Nondisclosure and nondisparagement agreements would also be void, though tort claims such as defamation survive. Expect provider retention to depend more on pay and culture than on contracts.
The bill would also bar any provider from directing a clinician’s professional judgment, including by limiting appointment time or the clinical orders available in the medical record (§ 2(b)(1)(B)). Rigid booking templates and protocol menus set by the business side deserve a second look.
The enforcement risk is the real story
Violations would be treated as unfair or deceptive practices enforced by the FTC (§ 2(e)(1)). State attorneys general could sue on behalf of residents (§ 2(e)(3)). Anyone injured by a violation could file a private suit for treble damages and attorney’s fees, with a right to a jury trial (§ 2(e)(2), (5)).
A court that finds a violation would be required to order the conduct stopped and, where applicable, order divestiture and disgorgement of revenue (§ 2(e)(4)). Violators could also be excluded from Medicare and Medicaid (§ 3). Most med spas are cash-pay, so exclusion matters less than the private right of action, which hands plaintiffs’ firms a federal claim against any MSO structure that looks too controlling.
How it fits with state law, and whether it will pass
The bill sets a federal floor. It expressly preserves state laws that are equal to or stricter than its ownership, clinician-protection and MSO rules (§ 4). States with strict CPOM doctrines would keep their rules. Med spas in states with little or no CPOM restriction today would see the biggest change.
Passage this year is unlikely. Congress has a compressed calendar before the November midterms, and the bill is a Democratic-only proposal. Its value is as a marker. These ideas could return in the next Congress, get folded into broader consolidation bills, or fuel more state laws like Oregon’s SB 951.
What med spa owners should do now
None of this is law yet, so there is no reason to restructure today. There is good reason to know where you stand. A practical checklist:
- Map who actually decides pricing, hiring, provider pay and revenue distribution, then compare that to what your MSO agreement says.
- Check whether your medical director or practice owner also holds a role or equity on the MSO side.
- Confirm the practice owner is licensed in, present in, and actively treating patients in the states you operate.
- Review whether your consumer brand belongs to the MSO or the practice.
- Inventory provider noncompetes and NDAs, and plan retention that does not rely on them.
- Confirm your MSO fees were set at fair market value and that the practice had its own advisors.
If you are raising capital or planning a sale, raise this bill in diligence. A federal version of Oregon’s approach would turn a single-state diligence question into a national one.
This post is general information, not legal advice. CPOM rules vary by state, and the bill may change or never pass. Talk to your legal counsel about your specific structure.