BILL NUMBER: S8442
SPONSOR: MAY
 
TITLE OF BILL:
An act to amend the not-for-profit corporation law, the business corpo-
ration law and the public health law, in relation to prohibiting non-
physician management services organizations or their representatives to
hold majority shares in or serve as directors of professional corpo-
rations organized to practice medicine
 
PURPOSE:
To safeguard medical decision-making from non-physician interference by
ensuring that professional corporations providing health care services
are controlled by licensed health care professionals-not corporate
management entities.
 
SUMMARY OF PROVISIONS:
This bill requires that professional corporations practicing medicine in
New York be owned and governed by licensed physicians. Specifically, it
mandates that licensed physicians hold a majority of voting shares,
occupy a majority of board seats, and serve in key officer roles
(excluding secretary and treasurer). It restricts the ability of non-
physician-owned management services organizations (MSOs) to control
corporate governance or clinical operations.
The bill also prohibits retaliation against medical professionals who
report violations of law or unethical practices, even if such disclo-
sures violate a nondisclosure or non-disparagement agreement.
Exceptions are provided for nonprofit and rural health entities serving
medically underserved communities. These requirements also apply to
hospitals operated by professional corporations.
 
JUSTIFICATION:
New York has long prohibited the corporate practice of medicine, recog-
nizing that clinical decisions must be driven by patient well-being-not
financial targets. But as health care delivery becomes increasingly
consolidated and commercialized, those protections have eroded. Private
equity firms and corporate entities are buying up medical practices
across the country, using management services organizations to skirt
regulatory limits and exert control over physicians' practices. These
arrangements often prioritize profitability over patient outcomes,
reduce transparency, and limit provider autonomy.
This consolidation is not just a problem for doctors-it's a growing
threat to consumers. Studies have shown that corporate consolidation in
health care leads to higher costs, reduced access, and lower quality of
care. Patients may find their physicians pressured to meet quotas, limit
time with patients, or adhere to corporate protocols that don't align
with best clinical practices. In some cases, entire practices are
restructured to maximize billing and revenue, even when such changes
don't serve patients' interests.
This bill closes loopholes that allow corporate interests to dominate
medical decision-making through technical workarounds. It restores mean-
ingful control to licensed professionals who are trained and ethically
bound to prioritize patient care. And it strengthens protections for
health care workers who report violations-ensuring they cannot be
silenced through retaliation or legal intimidation. By reaffirming the
professional integrity of health care practice and limiting profiteering
influence, this legislation supports a more transparent, accountable,
and patient-centered medical system in New York.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S8442: 1508 business corporation law, 2801 public health law, 2801-a public health law, 2801-a(4) public health law