Members of Congress are preparing legislation to push private equity out of healthcare, taking their cue from recent state measures that have successfully slowed deal activity.

A group of Democratic lawmakers plans to introduce the Stop Corporate Takeovers of Physicians Act in both the Senate and House of Representatives on Wednesday, according to their representatives.

The bill would prohibit investors in medical practices from influencing healthcare decisions, and would close what the lawmakers call "loopholes" that private-equity firms use to acquire the practices.

"Patients want to know that decisions about their health are being made by their doctors, not by Wall Street investors," said Sen. Elizabeth Warren (D., Mass.), adding that eliminating private equity's influence will help lower healthcare costs.

Along with Warren, the bill's backers in the Senate are Oregon Democrats Ron Wyden and Jeff Merkley. House supporters include Reps. Val Hoyle (D., Ore.), Alexandria Ocasio-Cortez (D., N.Y.) and Suhas Subramanyam (D., Va.).

The measure is modeled on an Oregon law enacted last year that has chilled private-equity healthcare dealmaking in the state.

"I'm proud of Oregon's pioneering state law that has been used by doctors to protect their independence, and it's time to take that model to the federal level," Wyden said.

The lawmakers' proposal comes amid a nationwide backlash against healthcare investment by private-equity firms, which are being blamed for rising healthcare costs and uneven quality of care. The opposition gained steam following the bankruptcies in 2024 and 2025 of formerly private equity-backed hospital operators, which led to the closing of numerous healthcare facilities.

The push against private equity is also being led by doctors, many of whom are frustrated by their declining professional autonomy as financial investors acquire more practices. The federal bill is backed by doctors' groups including the American Academy of Emergency Medicine.

The private-equity industry has pushed back on the narrative that it is responsible for the challenges facing U.S. healthcare. Private-equity trade group the American Investment Council said the industry provides badly needed capital to help healthcare businesses expand, serve more patients and improve care.

But private equity's critics have scored several state-level wins since the start of last year. Perhaps the biggest came in Oregon, which enacted the nation's strictest curbs on private equity's control over medical practices. California and Vermont followed with similar statutes. Other states have passed measures to review more private-equity healthcare transactions.

In addition to banning corporate interference in medical care, the congressional bill would prohibit noncompete and nondisclosure agreements for physicians. It would require that clinicians-not outside corporations-oversee a practice's administrative tasks such as employment decisions, staffing, billing and contracts.

That change would be a blow to the use of management-services organizations, an investment structure favored by private-equity firms. The bill would also ban the so-called "friendly physician" model, which, according to its critics, places a doctor as the nominal owner of a medical practice while a private-equity investor actually runs it.

The American Investment Council criticized the bill.

"Restricting investment in healthcare limits access to care," said Will Dunham, the group's president and chief executive. "Private equity provides physician practices with resources to broaden patient access and modernize equipment. It also gives doctors operational support, including managing burdensome paperwork, so they can spend their time focused on caring for patients, particularly in underserved areas."

Private-equity healthcare investment remains very active, with a record $182 billion in transactions globally last year, according to industry consulting firm Bain & Co.

But amid the political backlash, firms are more reluctant to invest in U.S. physician practices, preferring areas such as healthcare technology or pharmaceuticals. There were 216 healthcare-services deals in North America and Canada in this year's first half, down from over 1,300 in the whole of 2021, according to data provider PitchBook.

Analysts say new state laws are partly responsible. PitchBook analysts wrote that the Oregon and California laws "are lengthening transaction timelines, increasing deal costs and complexity, and making serial roll-up strategies"-in which a private-equity firm buys and combines several small businesses-"more complicated to execute."

The laws have also caused other challenges for investors. In May, a hospital operator in Oregon dropped plans to hire an out-of-state medical-staffing company after a judge said it could violate the new ban on corporate medicine. The same month, California Attorney General Rob Bonta penalized a private equity-backed dental business for violating the recently enacted statute.