State Laws Cut Private-Equity Acquisitions of Physician Practice Management Firms in Half

State regulators in more than a dozen states have enacted laws that tighten oversight of private‑equity deals in health care, according to a new report. The tighter rules are reported to be slowing the pace of acquisitions of physician practice management companies.

Deal activity has slumped dramatically, with the number of transactions falling from a peak of 851 in 2021 to just 105 in the first half of 2026. That represents roughly half the volume seen in 2025.

"It’s certainly been a big decrease," said Paul Pitts, a partner at Reed Smith who advises health‑care providers. He noted the sharp contraction in investment activity.

The decline could limit capital available for firms that run billing and operational services for clinics, potentially reshaping consolidation trends in the physician‑group market.