2 states take aim at noncompetes in healthcare

Some states are not waiting for the federal government to ban noncompete clauses in healthcare, and two Midwestern states have legislation on the move that would eliminate noncompete agreements for physicians.

The Indiana Senate passed a bill Feb. 7 that would ban noncompete clauses for physicians, according to IPB News. Supporters argued the bill would boost competition and could allow physicians to more easily move between practices, including in areas where there are gaps in care.

Opponents, which include hospital and employer groups, argued removing noncompete clauses would drive up costs in "bidding wars" for physicians.

South Dakota is also considering legislation to expand a ban on noncompete clauses in healthcare, according to a Feb. 7 report from CBS affiliate KELO.

The state passed legislation in 2021 to eliminate noncompetes for physicians, physician assistants, registered nurses and other advanced practice providers, and it is now considering whether to expand the legislation to include physical therapists, respiratory care practitioners, licensed social workers and other positions.

The state House of Representatives voted to expand the legislation Feb. 7. The ban on noncompete clauses does not apply to physician practice sales.

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