NEWS & INSIGHTS

The Fair Contracting for Health Care Practitioners Act (the “Act”) is a Pennsylvania statute enacted on July 17, 2024, that substantially restricts the use and enforcement of noncompete agreements for certain health care professionals. The Act became effective January 1, 2025. 

Purpose and Legislative Intent

The Pennsylvania General Assembly enacted the law in response to concerns that restrictive employment covenants in health care: 

• reduce patient access to care, 
• inhibit practitioner mobility, 
• contribute to shortages in rural and underserved areas, 
• interfere with continuity of patient care, and 
• discourage practitioners from remaining in Pennsylvania. 

The Act expressly declares that broad noncompete restrictions in the health care industry are contrary to Pennsylvania public policy. Under Section 4(a), any noncompete covenant entered into after the Act’s effective date is deemed void and unenforceable as against public policy. Thus, employers generally may not prohibit covered practitioners from practicing medicine or providing health care services after separation from employment.

Covered Health Care Practitioners

The statute applies to the following licensed professionals:

• medical doctors (M.D.s), 
• doctors of osteopathy (D.O.s), 
• certified registered nurse anesthetists (CRNAs), 
• certified registered nurse practitioners (CRNPs), and 
• physician assistants (PAs). 

Definition of a Noncompete Covenant

The Act defines a “noncompete covenant” broadly as an agreement between an employer and a covered health care practitioner that impedes the practitioner’s ability to:

• continue treating patients, 
• accept new patients, 
• practice independently, or 
• work for a competing employer following termination of employment. 

Exceptions

The Act contains limited exceptions under which restrictive covenants may still be enforceable and they include:

• The Sale of a Business, or
• Involuntary termination.

A one-year noncompete restriction may be enforceable if the practitioner was dismissed “for cause.” The Act therefore preserves limited employer protection in situations involving misconduct or justified termination. 

Patient Notification Requirements

The statute also imposes continuity-of-care obligations on employers when a practitioner departs.

If a covered practitioner leaves employment and has maintained an ongoing outpatient relationship with a patient for at least two years, the employer must notify the patient within 90 days. 

The notice must include:

1. the practitioner’s departure, 
2. instructions regarding transfer of medical records, 
3. information concerning the patient’s option to continue care with another provider, and 
4. the option to remain within the employer’s health system. 

Conclusion

The Act substantially limits the enforceability of non-compete agreements involving physicians and certain advanced practice providers. The statute reforms the balancing test for patient access, continuity of care, and practitioner mobility against employers’ interests.

If you would like to learn more about The Fair Contracting for Health Care Practitioners Act, please contact Eric A. Thomas via our Contact Form or by calling 724-776-8000.