The "Rhode Island Ban on the Corporate Practice of Medicine Act" establishes regulations to prohibit unlicensed individuals or entities from owning medical practices or employing licensed healthcare professionals. The act mandates that only licensed medical practitioners can hold the majority of shares and directorships in medical practices, ensuring that clinical decisions are made by qualified individuals. Exceptions are provided for specific healthcare entities, including safety net clinics and public hospitals, which may employ physicians under certain conditions.

The legislation also regulates contracts between medical practices and management services organizations, prohibiting practices such as straw ownership and dual ownership interests that could interfere with a licensee's professional judgment. It includes provisions that ban noncompetition agreements and restrict the ability of unlicensed entities to control or direct the clinical decisions of licensed professionals.

To enhance transparency, the act requires healthcare entities to report detailed ownership and control information to the Department of Health annually, including the legal name, business address, ownership interests, and contact information of representatives. Additionally, comprehensive financial reports and organizational charts must be submitted.

The Department of Health is granted authority to enforce compliance through audits and inspections, with specified penalties for violations, including civil penalties based on the size and revenue of the healthcare entity. The act is designed to take effect immediately upon passage, reflecting a commitment to improving oversight and accountability in the healthcare sector.