How to Deploy the MSO Model in Strong Corporate Practice of Medicine States

Our next example today of how an MSO model can help your health and wellness venture; let’s say you’re a healthcare entrepreneur and you’ve got an app, or you’ve got software, or you’ve got a brick-and-mortar. But you want to roll it across states, let’s say you pick the most populous states, the ones where you think you are going to have the biggest impact first; let’s say California, New York, Texas – states that have a lot of business impact.

Well, these are strong corporate practice of medicine states which means you have got to have separation between your venture which does the management and marketing side, and the medical venture which does the health and wellness side.

So, how do you do that? You use the MSO model. As we said many times, you have an MSO agreement between the MSO and the professional medical practice and that sets the terms of how you provide all the other services besides the clinical services, and you charge for them, and profit from them at fair market value – which can be a hefty percentage as long as it’s fair.

You know there are states that have not a strong corporate practice of medicine doctrine, but there’s still a concern about fee-splitting. So, there you have to decide: Do i want to be a little bit more conservative and efficient, and just have one model that i use across all the states, or do i want to divide into the strong and weak corporate practice of medicine states – and in those weak corporate practice of medicine states, perhaps you’ll hire doctors but you’re going to be sure that the contracts provide that they still have independent medical judgement – because that’s meant to help protect you even in a weak corporate practice of medicine state against charges of CPM violation and fee-splitting.

And often times, clients will simply choose the MSO model because they’re such a robust model and it’s usually defensible. So, if you’re in a weak corporate practice of medicine state but you have aggressive enforcement, you’ve got the MSO model and can be more defensible, that’s why it’s so powerful.

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