Management Services Agreements
Our practice frequently requires us to prepare management service agreements (MSAs) between medical groups and management services organizations (MSOs), sometimes representing the medical group, and other times representing the MSO. Often these agreements form an integral part of the structure of a transaction that we have recommended in order to comply with federal and state regulatory restrictions, particularly where physicians and non-physicians desire to organize a venture together. MSAs present many regulatory issues that require careful attention. A common issue is the control to be exercised by the management company, as the objective of the management company often is to attain a degree of control over the medical group or physician that is inconsistent with the corporate practice of medicine doctrine. Compensation issues also are common, both as to the amount of compensation (which, if excessive, triggers various regulatory issues), as well as to the form of compensation (e.g., percentage compensation, or “per-click” compensation). Still other regulatory issues may be triggered by the inclusion of marketing services, which can be viewed as akin to referrals or recommendations of services. Billing and collection issues also arise under MSAs, although we also have represented separate billing companies and drafted agreements for them that are focused narrowly on the provision of billing and collection services.
We have prepared many MSAs for hospitals, medical groups, and business entities, including a publicly traded physician practice management company.