PRIOR PRINTER'S NOS. 1917, 1960, 2817
PRINTER'S NO. 2959
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1633
Session of
2023
INTRODUCED BY FRANKEL, VENKAT, HILL-EVANS, MADDEN, DELLOSO,
PISCIOTTANO, SANCHEZ, KEEFER, FIEDLER, CIRESI, KRAJEWSKI,
FREEMAN, SHUSTERMAN, MALAGARI, N. NELSON, KHAN, INNAMORATO,
D. WILLIAMS, WEBSTER, HOWARD, O'MARA, BOROWSKI AND SAMUELSON,
AUGUST 29, 2023
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
APRIL 16, 2024
AN ACT
Prohibiting the enforcement of certain noncompete covenants
entered into by health care practitioners and employers.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Fair
Contracting for Health Care Practitioners Act.
Section 2. Legislative intent.
The General Assembly finds and declares as follows:
(1) Patient access to health care in this Commonwealth
often depends on geography, transportation and availability
of practitioners.
(2) Seventy-five percent of physicians are employed by
hospitals, health care systems or corporate entities.
(3) Consolidated hospital systems increasingly stretch
over broad geographic regions, meaning that a hospital
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network's noncompete clause can prevent health care
practitioners from practicing in large areas of this
Commonwealth, well beyond their initial employment location.
(4) Noncompete covenants in health care inhibit
competition that benefits employees and patients and can
deter needed health care practitioners from wanting to
practice in Pennsylvania.
(5) Providers constrained by noncompete covenants have
less freedom of practice for fear of losing employment and
being unable to work in their profession.
(6) Most rural areas of Pennsylvania can be considered
health care deserts in which patients must travel two or
three hours for their basic health care needs.
(7) Continuity of care is a fundamental public policy
goal that can help patients achieve their health care goals
and build trust with their health care practitioners.
(8) This Commonwealth cannot afford to continue losing
health care practitioners to surrounding states and must do
more to attract and retain them.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Employer." A person or group of persons that employ a
health care practitioner at a health care facility or office.
"Health care practitioner." As defined in section 103 of the
act of July 19, 1979 (P.L.130, No.48), known as the Health Care
Facilities Act. The term includes a licensed practical nurse.
"Noncompete covenant." An agreement that is entered into
between an employer and a health care practitioner in this
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Commonwealth and is designed to impede the ability of the health
care practitioner to work independently or for a competing
employer PRACTICE INDEPENDENTLY OR IN THE EMPLOYMENT OF A
COMPETING EMPLOYER AFTER THE TERM OF EMPLOYMENT.
"Patient." An individual to whom a health care practitioner
rendered professional services in the health care practitioner's
scope of practice for which compensation has been received by
the health care practitioner, regardless of the source of the
compensation.
"Primary health care facility or office." The office,
facility or location where a majority of the revenue derived
from a health care practitioner's services are generated.
Section 4. Noncompete covenants.
(a) Enforceability.--Except as provided under subsection
(b), the following shall apply:
(1) A noncompete covenant entered into or amended on or
after the effective date of this section is deemed contrary
to public policy and is void and unenforceable by an
employer.
(2) A noncompete covenant entered into or amended prior
to the effective date of this section is void and
unenforceable upon the renewal of a health care
practitioner's license, registration or certification within
this Commonwealth.
(b) Exception.--An employer may enforce a noncompete
covenant if all of the following apply:
(1) The primary health care facility or office where the
health care practitioner is employed is located in a county
of the sixth, seventh or eighth class.
(2) The geographic restriction is less than a 45-mile
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radius from the primary health care facility or office.
(3) The length of the noncompete covenant is no more
than two years.
(c) Construction.--Nothing in this section shall be
construed to prohibit the enforcement of a contract provision
that allows an employer to recover reasonable expenses from a
health care practitioner, if the expenses are:
(1) Directly attributable to the health care
practitioner and accrued within the three years prior to
separation, unless separation is caused by dismissal of the
health care practitioner.
(2) Related to relocation, training and establishment of
a patient base.
(3) Amortized over a period of up to five years from the
date of separation by the health care practitioner.
Section 5. Notification.
(a) Patient notification.--Following the departure of a
health care practitioner from an employer, the employer shall
notify the health care practitioner's patients seen within the
past year of the following:
(1) Where the health care practitioner will be rendering
services in the future, if known.
(2) How the patient may:
(i) continue as a patient of the health care
practitioner; or
(ii) be assigned a new health care practitioner
within the existing employer.
(b) Time period.--The employer shall provide the notice
within 90 days of the health care practitioner's departure.
(c) Applicability.--The notification requirement shall apply
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to a physician, certified registered nurse practitioner or
physician assistant with an ongoing outpatient relationship with
the patient.
Section 6. Effective date.
This act shall take effect as follows:
(1) This section and section 4 shall take effect
immediately.
(2) The remainder of this act shall take effect in 30
days.
(1) SECTION 5 SHALL TAKE EFFECT IN 30 DAYS.
(2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT
IMMEDIATELY.
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