Competition can be a good thing for the NHS but private companies should not be allowed to cherry pick certain patients, according to the NHS Future Forum.
They should also be compelled to support training and development for healthcare professionals while opening their board meetings to public scrutiny.
The announcement was made at the publishing of its report into the two month long listening exercise about the government's Health and Social Care Bill.
It unveiled several key changes that should be made to the Bill, including revising the proposed role of Monitor and a greater integration of services across the NHS.
The NHS regulator should focus on promoting integration of health services rather than competition, which itself "should not be an end itself", the panel noted.
And it urged greater transparency and clarity including the requirement of all major NHS service providers to hold board meetings in public and publish those notes.
This should encompass private providers along with public bodies, something which could be introduced in contracts.
Commissioning consortia should include other healthcare professionals and specialists particularly when commissioning specialist services, but should be GP led, it added.
Speaking at the launch, Professor Steve Field, chairman of the NHS Future Forum, explained that: "The government was wrong to give monitor a role to promote competition.
"Monitor ought to be the body that regulates, stops bad practice and protects citizens' and patients' interests.
"But in certain areas you will need competition because the services are not good enough," he added.
However, Prof. Field noted that increased transparency was a key part for NHS providers to play.
Referring to the opening up of board meetings to public scrutiny he continued: "if its taxpayers money, the population should have a say in how it's spent and know how its spent."
Sir Stephen Bubb, CEO of the Association of Chief Executives of Voluntary Organisations (ACEVO) and a member of the future forum panel also explained that competition was a good thing for the NHS.
"We need to move the debate from whether competition works to how to maximise the benefits and reduce the risks," he said.
In response, the British Medical Association (BMA) praised the way the listening exercise had been conducted and applauded many findings, but warned the government now needed to act.
"The Future Forum's recommendations address many of the BMA's key concerns, to a greater or lesser extent," said Dr Hamish Meldrum, chairman of the BMA Council.
"We are hopeful that our ‘missing' concerns, such as the excessive power of the NHS Commissioning Board over consortia and the so called ‘quality premium' will be addressed as more detail emerges.
"Obviously, the critical factor is now how the government responds, as well as ensuring that the detail of the changes matches up to expectations.
"But if the government does accept the recommendations we have heard today we will be seeing, at the least, a dramatically different Health and Social Care Bill and one that would get us onto a much better track," he added.
