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Colorado’s statewide ban on physician noncompete agreements took effect last month, but that’s cold comfort for Amy Glaser-Carpenter, DO.

The primary care physician left the state in 2017 because she was unhappy working at San Luis Valley Health, Alamosa, Colorado. Glaser-Carpenter, who loves the outdoors, wanted to hang her own shingle so she could remain in the valley, surrounded by its sand dunes and mountains. But a noncompete agreement with the health system barred her from practicing medicine there for 24 months.

So Glaser-Carpenter moved her family halfway across the country. Now, she’s closer to her parents, she said, but there are no mountains in southeast Indiana.

Tens of thousands of US doctors are locked in similar predicaments to Glaser-Carpenter’s. While there are no nationwide tallies of doctors working under noncompetes, one 2018 study of primary care physicians found that 45% of clinicians who work at group practices are bound by these agreements.

But noncompetes for doctors may be on the wane — at least at the state level. In addition to Colorado, lawmakers in at least a dozen other states, including Wyoming, Indiana, Maryland, and Oregon, have banned or restricted their use for physicians in recent years. Montana’s new noncompete ban takes effect in January.

Preserving Patients’ Access to Care

The bans were driven by lawmakers’ desire to preserve access to healthcare, according to Maureen Hensley-Quinn, who specializes in healthcare costs and coverage at the nonprofit National Academy for State Health Policy (NASHP). At the same time, doctors say that noncompete agreements have become more onerous as health systems consolidate and grow.

NASHP published model legislation last summer banning most noncompetes at the request of state lawmakers worried about provider shortages in primary care, maternity services, and behavioral health.

Preserving access to primary care and continuity of care were major concerns for Colorado lawmakers, said Corey Lyon, DO, president of the Colorado Academy of Family Medicine. The state also recently banned noncompete physician assistants, dentists, and advanced practice registered nurses.

State Noncompete Bans Vary Widely

How these new laws affect doctors varies by state.

Some state laws are not retroactive, including in Colorado and Minnesota, so physicians who were previously practicing under noncompetes before laws took effect remain bound by those agreements.

That reality frustrates many doctors, including one primary care physician in northern Minnesota whose employment contract renews annually. She told Medscape Medical News that her nonprofit health system contends that her 2-year noncompete agreement remains valid with each extension.

The doctor, who requested anonymity because she fears employer retribution, said that working at her clinic has become increasingly unpleasant over the past several years.

When the COVID-19 pandemic started, she was asked to increase her patient load by three appointments per day, a policy that still stands 5 years later. Vacancies left by medical assistants and other clinical staff remain unfilled, adding administrative burdens.

“Churning bodies through a clinic is the most important thing,” she said of her employer.

Hospitals: Noncompetes Protect Our Investments

The American Hospital Association (AHA) declined to comment on the proliferation of state noncompete bans, telling Medscape Medical News it doesn’t take positions on state-level policies.

However, the organization has previously stated that noncompete agreements promote the continuity and integration of care, and “are valuable tools for protecting investments that hospitals make to recruit doctors and senior executives. This is particularly important in rural and other medically underserved areas.”

The organization also argued that hospitals need to protect proprietary information like patient lists and business strategy.

As state bans become more common, more health systems could instead sue former employees over alleged trade secrets violations, Boston-based attorney Russell Beck told Medscape Medical News. Such “secrets” might involve patient contact information or knowledge of patients’ specific medical issues.

Costly Legal Battles

State lawmakers considering noncompete bans remain wary of potential disruption that might occur if every physician’s noncompete becomes void at the same time, said NASHP’s Hensley-Quinn.

Health systems seeking clarity might take legal action against states, or clinicians will sue to be released from their contracts, she predicted.

Legal experts disagree, for example, about whether Arkansas’ new law will void all physician noncompetes after taking effect in August. Some argue that there would have to be clear legislative intent for the law to be retroactive. But the law only states these agreements are void as of August 5, said H. Scott Smith, director of governmental affairs for the Arkansas Medical Society.

“It might take a court ruling to decide,” Smith told Medscape Medical News via email.

But physicians may hesitate to take legal action, including the Minnesota doctor. She said her health system has the financial resources to drag out litigation well beyond her noncompete’s expiration.

Louisiana offers a unique solution: It allows for 2-year physician noncompetes, but those agreements expire after primary care doctors finish 3 years of employment and specialists finish 5 years. Noncompetes signed before Louisiana’s law took effect will expire in January 2028 or January 2030, depending on the physician.

Some Louisiana health systems sought to renegotiate employment contracts after it became clear that the legislature was going to limit physician noncompetes, said Conrad Meyer, a New Orleans-based attorney who specializes in representing physicians.

Meyer said at least a half dozen of his clients have been offered large retention bonuses, including one for more than $200,000. Physicians are required to pay back a percentage of these bonuses if they quit before a certain time, which Meyer said can be 7 or 8 years.

Louisiana’s law also limits noncompetes to the parish that a physician practices in, as well as two contiguous parishes. In Maryland, the geographic limit is no greater than 10 miles from a physician’s primary place of employment.

Other states that have sought to reign in noncompetes have not placed geographic limits on these agreements; including Pennsylvania’s new law which caps noncompetes at 12 months.

Utah passed similar legislation in 2016. But some physicians still leave the state because of these agreements, according to Faraz Luni, MD, an electrophysiologist. He was one of thousands of physicians who contributed a public comment in support of the Federal Trade Commission (FTC)’s proposed national prohibition on noncompete in 2023.

Indiana primary care doctor Sara Bajuyo also commented that noncompetes “hogtie physicians” and interrupt continuity of care by forcing doctors to move away from their patients.

The forceful response the FTC elicited from physicians raised the issue’s profile among policymakers, said Evan Starr, who researches the effects of noncompetes at the University of Maryland, College Park, Maryland.

The FTC announced the ban the following year. But a federal lawsuit by several trade groups put the rule on hold.

The AHA and the Federation of American Hospitals jointly filed an amicus brief arguing that the FTC overstepped its regulatory authority and failed to consider alternatives to a total ban.

Litigation is pending, and the Trump Administration is expected to decide soon whether it will defend the Biden-era policy.

Noncompetes Evolve Amid Healthcare Consolidation

The medical profession’s adversarial stance on noncompetes is relatively recent, said Thomas Conley, a Chicago-based attorney and member of the American Society of Medical Association Counsel. The American Medical Association (AMA) for years remained neutral but in 2023 agreed to support banning the agreements for physicians working for hospitals or staffing companies.

Conley said noncompete agreements are helpful to independent practices — especially those in small communities since they prevent junior doctors from poaching patients from a former employer.

But the agreements’ role has evolved amid the rise of private equity and consolidation in healthcare.

Investors and physicians can butt heads over how practices should operate, which was apparent in the physician FTC comments.

Emergency Medicine Doctor Daniel Lasoff, MD, wrote in January 2023 that private equity firms cut wages and decrease staffing to unsafe levels: “Non-compete clauses are just one of many tools they use to suppress wages and poor working conditions on the staff.”

At the same time, these investors can save practices that are struggling under financial duress or provide needed capital for technology updates or additional personnel, said Hensley-Quinn.

Overall, the percentage of doctors employed by private practices is shrinking: According to a recent survey from the AMA, it dropped from 60.1% in 2012 to 42.2% in 2024.

Simultaneously, health systems are consolidating through mergers and acquisitions: Data from consulting firm Kaufman Hall showed there were 831 of these transactions between 2015 and 2024.

Therefore, a prohibition on working near any hospital or clinic owned by a large health system can dramatically reduce a physician’s employment options.

For example, Shyam Thakkar, MD, had signed a noncompete before Pennsylvania’s new law took effect. But when his contract wasn’t renewed at his Pittsburgh-area practice, the gastroenterologist was barred from working within 10 miles of hospitals owned by his former employer and working for the employer’s main rival. There are more than 50 hospitals between the two systems. Thakkar now works in West Virginia.

Several physicians who spoke to Medscape Medical News for this story said that after getting burned by a noncompete agreement, they’ll never sign another.

That includes Glaser-Carpenter, who still misses the mountains and sand dunes of the San Luis Valley. Her family had originally planned to move back, but after 2 years in Indiana they’d settled into a new life, she said.

Glaser-Carpenter opened Carpenter Family Care, a direct primary care clinic serving 400 patients with the help of two registered nurses and a medical assistant. Despite the stress of being a business owner, she said can spend more time with patients and is much happier practicing medicine on her own terms.

“I enjoy [it] much more than I did in a system where it was assembly line medicine,” she said.