The legal landscape surrounding physician non-compete agreements remains in flux as courts, regulators, and state legislatures continue to debate the appropriate scope of restrictive covenants in healthcare. While federal efforts to broadly restrict non-compete agreements have faced significant legal challenges, many states have independently enacted limitations on physician non-competes or increased scrutiny of their enforceability. As a result, ambulatory surgery centers should review existing operating agreements and governance structures to ensure they remain effective under current state law.

For decades, many physician-owned surgery centers relied on restrictive covenants as one mechanism to discourage physician-investors from diverting cases to competing facilities. As the enforceability of restrictive covenants becomes increasingly dependent on state specific laws and judicial interpretation, many boards are evaluating alternative physician alignment strategies that emphasize economic incentives, governance structures, and participation expectations rather than relying exclusively on restrictive language. Operating agreements are increasingly incorporating utilization requirements, performance-based equity structures, buy-sell provisions, retention incentives, and governance mechanisms designed to align physician ownership with facility participation, subject to fair market value standards and applicable law. By creating durable financial and operational alignment, centers can strengthen long-term stability while preserving flexibility in an evolving legal environment.