Noncompete agreements, certificate-of-need laws and tax incentives are some of the most powerful policy levers shaping the way that independent physicians practice.
Marcelo Hochman, MD, a Charleston-based independent physician and former president of the Independent Doctors of South Carolina, has spent years advocating for a “trifecta” of legislation that he sees as vital to transforming the state’s physician shortage while leveling the playing field between independent practitioners and corporate entities.
The first piece is done. South Carolina’s CON law — which required hospitals and other providers to obtain state approval before adding services or capacity — was repealed in 2023.
The second piece came close this past legislative session. A bill to ban physician noncompete agreements passed through subcommittee and full committee before two state senators blocked it from reaching the floor for debate. Both represented rural counties with hospitals that opposed the bill.
“The arguments are all the same, and the people who are against the noncompete were the same ones that were against getting rid of the certificate of need,” Dr. Hochman told Becker’s. “There aren’t any good arguments left. It really is all about protecting those that are the incumbents on the issue.”
The bill is dead for the current session but not permanently. Under South Carolina’s two-year legislative cycle, advocates have until January to re-engage legislators. Dr. Hochman said the hearings were productive — senators’ questions surfaced the problems noncompetes create for physician mobility — and the opposition is now identified.
“It’s not the end of the world, because we know who’s against it,” he said. “The testimony was very good. It actually just helped highlight some of the issues that come with having the ability to enforce that part of the contract.”
The third bill is the one Dr. Hochman describes as the most novel. It would create a South Carolina state income tax incentive for physicians who provide documented pro bono care — not the hospital accounting category called “charity care,” which he argues has become a catchall for undercompensated billing, rather than genuine free services.
“The hospitals already get benefits for claiming charity care, and there are data on this that show that the amount of charitable care that is claimed is not truly reflective of true pro bono care,” Dr. Hochman said.
The current version has been drafted with specific criteria: physicians must have an established relationship with a qualifying charitable organization, there are limits on what counts and the incentive is capped, Dr. Hochman said. A sponsor has not yet been identified, and the goal is a January introduction.
The connection between the three bills is practical, Dr. Hochman said. In South Carolina, 75% to 80% of physicians are now employed by hospitals or health systems. An employed physician who wants to provide free care faces an institutional obstacle: hospitals will still pursue reimbursement even when the physician does not intend to charge. Dr. Hochman, who has an operating room in his office, said he has been able to absorb cases on his own — but the combination of non-compete restrictions and hospital employment structures blocks most physicians from doing the same.
“Right now physicians who are employed — which is 75% to 80% in South Carolina — want to do charitable care, or a charitable case, they can’t get them in the hospital. I can’t just bring a patient to the hospital,” he said. “I don’t know a physician who wouldn’t do a case for free or take care of a patient. But if it was actually incentivized, that would take some pressure off of some of the Medicaid stuff. It’s still small pieces, but it just takes a bunch of small pieces to make a difference.”
Whether all three bills can be completed in one cycle is uncertain, but the strategic logic connecting them is clear: physician mobility, practice autonomy and financial incentive for free care are three sides of the same problem.
“The doctor could practice wherever he or she wanted, provide whatever services he or she wanted,” he said. “The noncompete would be, wherever they wanted, and you had an incentive to provide charitable care — that changes a lot of things in a very small state like ours.”
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