What is a Management Services Organization or MSO and how does help to reduce the risks associated with medical practices and the healthcare industry?  The Management Service Organization is a legal business entity which is basically structured to manage many of the more mundane aspects of the business side of medicine while allowing your medical entity structure to retain additional profits in a legal and ethical manner.

The question isn’t what is a Management Services Organization or MSO, it real is, what can it do for any medical professional or healthcare business? An MSO allows business experts to focus on the business side of the equation, while medical professionals focus on delivering exceptional medical care and patient experience.   What would it mean if any physician’s practice, physical therapy group, ophthalmology practice, psychiatry or psychology clinic, dental practice or healthcare provider could focus on the delivery of medical care and the delivery of a world-class patient experience?  The healthcare professionals and staff usually remain within the structure of the Professional Corporation of the practice or medical business.  While the MSO provides for the facilities, Electronic Records Management (ERM) and data processing, scheduling, payroll accounting and taxes, administration, marketing, billing and even collections side of the equation.

While the concept of a Management Services Organization or MSO has many advantages and avenues to increase retained profits it is not without risk.  The MSO is will still have an impact on any licensed professional associated with the entity.  The MSO must be carefully structured to mitigate legal and financial risks which could threaten the license of the medical professionals with an interest in the MSO.  You must carefully evaluate issues such as fee-splitting and Stark Law as it relates to the revenues of minority investors or shareholders who are unlicensed medical professionals.

Pro-Tip: “Consider an MSO like your administrator for your business. But if you’re in the healthcare business, your administrator can’t do it all. It’s complicated. And there are actual schools that can take people to learn some of the things that your administrator’s supposed to do, like coding, like billing, like compliance, like HR, like leasing, like software programs. So many things that you have to deal with so many more clients, patients, you have to do so much that MSOs are a good option. Also, you can get non-doctors to partner with you and invest in your company to make you more profitable while you focus on being a doctor.

Some of your biggest organizations in the United States are run by MSOs or a combination of MSO and other entities. Sometimes you get so big you have to have individual contracting entities that just do that. Yes, they go out and find you the best pricing, or they’ll work with a multitude of other healthcare practices and do a group location of better pricing and contracts for the doctors. 

MSOs are different for every kind of practice. Hmm. And every kind of practice has a classification under the code as to what they can’t do, who they can’t hire, and who they can practice medicine with, or who can supervise who. Hmm. And we do that with various different types of ancillary service organizations, which means like X-ray companies, MRI, PT, physical therapy, imaging, all those things that you run your business with and the rules on how you can and cannot work with them, those can be covered with your MSO.

Sometimes our clients will be approached by people who want to set up MSOs. And sometimes the driving factor is the MSO itself who’ll go out and locate a doctor and say, look, I’ve got this great business model. We collect more. We save your personal time and we make you more profit. Once you come with us. Then they’ll come to us and say, write up a custom MSO with this doctor in mind with these parameters, and set it up for us. And we do that. Hmm. We bring two parties together and write it up in such a way that they can start a business.” – Dan Watkins, Founding Partner

The Watkins Firm provides sound advice and counsel based upon decades of experience with California medical practice and healthcare law.  We closely evaluate all aspects of a proposed Management Services Organization or MSO to ensure it is compliant with all California licensing and anti-kickback laws, and that the MSO never has the power or ability to interfere with medical decisions and/or the practice of medicine.    Learn more about what is a Management Services Organization or MSO and whether it is a legal, ethical and profitable fit in your medical or healthcare business strategy.

We invite you to review our podcast Episode 30 – Management Services Organization or MSO as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.