Bill Name: Senate Bill 951 (SB 951) 

Primary Sponsor: Senator Patterson

Status: 6/09/2025 signed by Governor

AmSpa’s Take: Many states restrict non-physician ownership of medical practices. Management services organizations are businesses that specialize in providing business support services to medical practices. This has the benefit of freeing up the physician’s and other providers’ time to focus on treating patients rather than paperwork.

Analysis: Currently, Oregon, as in several other states, restricts the ownership of medical practices to licensed providers. This is commonly known as the “corporate practice of medicine” doctrine (CPOM). A common and well-established way for non-physicians to work with medical practices is using a management services organization (MSO). MSOs are general business entities that specialize in providing the majority of business services to a medical practice. These services can include accounting, payroll, HR, managing inventory, placing advertising, and other administrative functions. SB 951 would place substantial restrictions on how the owners and employees of an MSO may interact with the medical practice.

SB 951 would prohibit anyone who is a shareholder, director, member, manager, officer or employee of an MSO from:

• Owning or controlling a majority of shares of the medical entity;
• Serving as a director, officer, independent contractor, or employee of a medical entity;
• Exercising voting rights or proxy power over shares of the medical entity;
• Controlling or restricting the sale of the medical entity;
• Issuing shares of stock of the medical entity;
• Paying dividends on a medical entity’s stock; and
• Acquiring or financing the acquisition of a majority of shares in the medical entity.

SB 951 would also prohibit people associated with an MSO from exercising de facto control over the administrative, business or clinical operations of a medical entity that would affect the medical entity’s clinical decision making or the nature or quality of medical care they provide. This includes:

• Hiring or firing, setting schedules or compensation for medical licensees;
• Setting clinical staffing or the time medical licensees may see patients;
• Determining diagnostic codes;
• Setting patient billing and collection policies;
• Advertising for professional services under a non-medical entity name;
• Setting prices or rates for professional services; and
• Negotiating, entering, performing or terminating contracts with third party payors or with persons who aren’t employees of the medical entity. 

The MSO can still provide services that assist the medical entity in performing all of these tasks as long as the MSO is not able to exert de facto control. MSOs can also purchase and lease assets for the medical entity and provide consultation, support, and advice on all manner of business operations, such as accounting, budgeting, legal compliance, HR, real estate and building management, and contract negotiation. SB 951 also exempts several specific classes of people from the above prohibitions. These include owners or employees who meet certain requirements or where the medical entity owns a majority of the MSO, or a physician who has ownership of both medical and MSO entities and meets additional requirements.   

Many states attempt to pass laws regarding the scope of MSO practices. Often, they attempt to limit avenues for abuse or exercising undue control over the medical practices. These can often make it more difficult for compliant MSOs to function effectively. If you would like additional information, to read the language of the bill or to contact the sponsors or committee, you can find the information you need through this link: SB 951.