What Healthcare Practices, MSOs, and Investors Must Know Before 2026 and 2029
Oregon has quietly enacted one of the most aggressive corporate practice of medicine (CPOM) reforms in the country.
Senate Bill 951 (SB 951), formally titled the Act Relating to the Practice of Health Care, was signed into law on June 9, 2025, and it fundamentally reshapes how Management Services Organizations (MSOs) and professional medical entities may be structured and operated in Oregon.
This is not a cosmetic update. SB 951 directly targets common MSO-supported practice models and requires structural separation, ownership unwinding, and contract rewrites on a defined timeline.
Even practices that believe they are “CPOM-compliant” under historical Oregon guidance may now be out of compliance.
Executive Summary: Why SB 951 Matters
SB 951 does three major things:
- Prohibits most cross-ownership between MSOs and the professional medical entities they support
- Codifies clinical autonomy requirements directly into statute
- Invalidates many restrictive covenants traditionally used in MSO and provider agreements
The law applies broadly to medical practices, management companies, PE-backed platforms, and investors, not just traditional physician practices.
Compliance Deadlines You Cannot Ignore
SB 951 creates a two-track compliance timeline:
New Arrangements
- Effective January 1, 2026
- Any new MSO/PC structures must be fully compliant immediately
Existing Arrangements
- Hard compliance deadline: January 1, 2029
- All legacy arrangements must be restructured, renegotiated, or unwound by this date
There is no grandfathering beyond 2029.
Before vs. After SB 951: What Changed?
Before SB 951
Historically in Oregon:
- MSOs or MSO owners could hold minority ownership in the professional entity
- Physicians could hold interests in the MSO supporting their practice
- Transfer restrictions, management control provisions, and non-competes were common
- CPOM compliance relied heavily on case law and informal guidance
After SB 951
SB 951 largely bans cross-ownership, with only narrow statutory exceptions.
Practical effect:
- A physician cannot own an MSO that manages their own practice
- An MSO cannot own any interest in the professional entity it supports
- “Friendly PC” and “split equity” models must be carefully re-evaluated
Core Structural Requirements Under SB 951
1. Professional Entity Ownership
- Professional corporations must be 100% owned by licensed healthcare professionals
- Owners must be licensed to provide the same services as the entity
- No silent MSO ownership, options, profit interests, or shadow equity
2. Mandatory MSA Provisions (Now Statutory)
All Management Services Agreements must explicitly preserve clinical independence, including:
The PC must retain exclusive authority over:
- Clinical decision-making and patient care
- Hiring, supervision, and termination of clinical staff
- Patient records, privacy, and confidentiality
- Clinical policies and protocols
This language is no longer “best practice.” It is required by statute.
3. MSO Control Is Explicitly Prohibited
SB 951 sharply defines and prohibits direct and de facto control by MSOs.
MSOs may not:
- Direct or influence professional medical judgment
- Control or dictate billing policies
- Negotiate payor contracts on behalf of the PC
- Control clinical hiring decisions
- Restrict or block a provider’s ability to sell their PC interest
This is a major shift. Many functions previously treated as “administrative” are now expressly prohibited.
Restrictive Covenants: A Major Shift
SB 951 introduces sweeping limitations on restrictive covenants.
Generally Prohibited (With Narrow Exceptions):
- Non-compete agreements restricting physicians or nurses
- Non-disclosure agreements between medical licensees and MSOs
- Non-disparagement clauses involving medical licensees
This applies to agreements:
- Entered into or renewed on or after June 9, 2025
Many existing agreements will become unenforceable upon renewal.
Transparency and Disclosure Requirements
SB 951 reinforces and expands disclosure obligations under ORS 58.375, requiring:
- Clear disclosure of ownership structures
- Transparent reporting of management arrangements
- Licensing alignment across all operating entities
Failure to disclose properly can independently trigger regulatory scrutiny.
What Happens If You Ignore SB 951?
Non-compliance carries serious risk:
- Regulatory enforcement actions
- Invalidation of MSAs
- Challenges to ownership structures
- Exposure in transactions, audits, and payor reviews
- Inability to close financings or exits
This law gives regulators clear statutory authority, not just interpretive discretion.
Immediate Action Items for Practices and MSOs
If you operate in or plan to enter Oregon, you should act now:
Review All MSAs
Ensure required autonomy provisions are present and enforceable.
Audit Ownership Structures
Identify and unwind prohibited cross-ownership.
Review Provider Agreements
Remove or revise unenforceable non-competes, NDAs, and non-disparagement clauses.
Verify Licensure
Confirm all PC owners are appropriately licensed.
Update Governance Documents
Align bylaws, operating agreements, and policies with SB 951’s separation mandate.
Why SB 951 Matters Beyond Oregon
Oregon has joined a growing group of states codifying CPOM enforcement rather than relying on case law.
SB 951 is likely to:
- Influence enforcement in other states
- Be cited by regulators nationwide
- Shape future MSO legislation
For multi-state platforms, Oregon may now be the most restrictive jurisdiction in your footprint.
Bottom Line
SB 951 is not a tweak. It is a structural reset.
Healthcare operators who wait until 2028 will be scrambling. Those who act now can restructure thoughtfully, preserve value, and avoid regulatory disruption.
If your model relies on:
- MSO equity participation
- Management control over revenue or staffing
- Restrictive covenants to protect enterprise value
You need to reassess, sooner rather than later.