Pennsylvania mulls the end of medical non-compete agreements | State

(The Center Square) – Non-compete agreements are common in healthcare to restrict competition. However, a bill slowly making its way through the General Assembly would ban those agreements, making Pennsylvania one of the few states to rescind them.

HB681 would ban enforcement of non-compete clauses citing a shortage of health workers, the Commonwealth’s aging population, high medical school debt and continuity of care needs to avoid enforcing the agreements.

However, the legislature allows exceptions. Non-compete clauses could still be enforced if the primary health care facility is located in a county with a population of 90,000 or fewer; the geographical restriction is less than 45 miles; the agreement is only valid for two years; and it only applies to a primary facility or office. A covenant could still apply where an employer is an independent practice.

“Many of these non-compete agreements contain geographic restrictions on where the physician may seek new employment,” wrote Rep. Torren Ecker, R-Abbottstown, in a legislative memo. “With the increasing consolidation of healthcare systems across the Commonwealth, this constraint can severely limit what a healthcare practitioner can do. These interruptions in care harm patients, choke continuity of care by limiting patients’ ability to continue to see their doctor of choice, and result in higher healthcare costs statewide.”

Non-competition clauses are used in many professional fields – so many that they have attracted federal attention. President Joe Biden gave one supreme command in 2021, prompting the Federal Trade Commission to restrict or ban the agreements. California, North Dakota, Oklahoma and Washington, DC have strong prohibitions to the agreements, while Illinois, Oregon, Nevada and Virginia have more limited bans.

The agreements have also drawn the ire of medical groups.

The American Academy of Family Physicians Calls Non-compete clauses “lose-lose” and “particularly harmful” to medical practice, citing a 2018 survey that found non-compete clauses affected 45% of GPs in group practices. The American Medical Association argued that “Doctors in training should not be required to sign non-competition agreements as a condition of participation in a residency or fellowship program.”

However, it’s unclear if the law will change in Pennsylvania. Ecker introduced HB681 in February 2021 and achieved a second proving by April, but has since stalled.

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