Oregon gives existing medical MSO structures until 2029 to unwind, and more states demand notice of private equity deals

The friendly physician model, where an investor-owned management services organization runs a physician-owned practice through management agreements and stock transfer restrictions, is now illegal in Oregon for new structures. SB 951 bars an MSO and its owners, directors, officers and employees from owning or controlling a majority of a medical practice it manages, and it voids most medical noncompetes.

Existing structures have a grace period, not an exemption. Under HB 3410, the ownership and control limits apply from January 1, 2026 to MSOs and practices formed after June 9, 2025, and from January 1, 2029 to those that already existed. Any sale or transfer of interests on or after January 1, 2029 triggers the rules for legacy entities too, so an investor buying into an Oregon practice today is buying a structure that has to be rebuilt before the exit.

In Oregon, the 2029 date is a deadline to restructure a legacy MSO, and any transfer after it brings the structure under the new rules.

Notice laws turn closings into regulatory clocks

California’s AB 1415, effective January 1, 2026, makes private equity groups, hedge funds and MSOs give the Office of Health Care Affordability 90 days’ notice before closing covered deals. Massachusetts has required notice of transactions involving significant equity investors and MSOs since April 8, 2025, with a 60-day notice period. Indiana has required 90 days’ notice to the Attorney General for health care deals with combined assets of at least $10 million since July 1, 2024. Illinois’s HB 5000 is reported to extend 30-day notice to private equity transactions from January 1, 2027.

The structuring consequence

Practice-level LLC structures need to be mapped state by state before any recapitalization. Several notice laws, including Massachusetts and Washington, reach sale-leasebacks of medical real estate, so a landlord LLC buying a practice’s building can become a party to a reviewable transaction. The purchase agreement needs the notice period as a closing condition.