The physician practice landscape has shifted significantly over the last decade as the industry becomes increasingly consolidated and reimbursement rates fall below the cost of running business.
This combination of pressure has become overwhelming for some independent practices. Becker’s reported 23 physician practice closures in 2025, reflecting continued strain from rising costs, reimbursement challenges and regulatory scrutiny.
Here are 5 recent physician practice closures and how they reflect ongoing volatility in the industry:
1) Johnson City, Tenn.-based primary care group State of Franklin Healthcare Associates shuttered four primary care clinics as it navigates financial challenges. Highlands Family Medicine in Johnson City; Pediatrics of Bristol (Tenn.); Abingdon (Va.) Primary Care; and OB-GYN Specialists of Kingsport (Tenn.) closed in January. The closures followed SOFHA’s December announcement that it received lending support from Ballad Health to help retire debt and remain independent.
In a Feb. 17 report by CBS affiliate WJHL 11, SOFHA and Ballad confirmed that the solution was “temporary” and that Ballad was not acquiring SOFHA. The move correlates with early signs of growing support for independent practices as more healthcare stakeholders become aware of the negative impact consolidation has on healthcare access. Additionally, some physicians have become drawn to private practice in recent years as they seek more autonomy and independence in their practice.
2) Fatade Health & Medical Center in Martinsville, Va., will close April 29 after nearly two decades of operation. The clinic, led by Ayokunle Fatade, DO, cited ongoing regulatory and law enforcement scrutiny as the reason for the closure. Dr. Fatade said the practice had faced pressure for the past seven years, referencing investigations, surveillance and actions by the Virginia Board of Medicine and a federal task force.
Regulatory burdens have been cited by other physicians as one of the factors contributing to burnout for independent practices. Prior authorization is frequently cited as one of the most burdensome non-clinical tasks that physicians and their teams must manage, as well as other other CMS-mandated reporting requirements.
David Eagle, MD, president of the American Independent Medical Practice Association, told Becker’s that the Medicare Merit-based Incentive Payment System was a major burden for independent physicians. MIPS ties clinician payments to performance, theoretically rewarding quality and penalizing poor outcomes through a performance-based framework in CMS’ Quality Payment Program. There has been significant back and forth between CMS and physician advocacy groups in recent years regarding the points threshold and other aspects of the program.
