Binding into a management services agreement (MSA) with an outside organization can streamline administrative operations, improve efficiency, and allow healthcare providers to focus on delivering high-quality care to patients.
However, taking into account the complex regulatory requirements under federal and California state laws is crucial to safeguarding patient privacy, upholding clinical and ethical standards, and avoiding potential legal issues. Non-compliance can weaken patient trust and lead to serious legal consequences for both the healthcare provider and the management services organization involved.
At Fenton Jurkowitz Law Group, we offer top-tier legal advice as you prepare and negotiate healthcare-managed services with external companies, ensuring proper regulatory compliance. Our California healthcare attorneys outline some of the basics below in our Management Services Agreements 101: Preparation and Negotiation guide.
Management services agreements (MSAs) are binding contracts used to define the relationship between two companies, in this case, a healthcare provider, such as a physician, group practice, clinic, or larger healthcare organization, and a management services organization (MSO).
The MSO provides administrative, financial, and operational services to the healthcare provider, allowing the provider to dedicate their time and energy to prioritizing patient care.
Some of the services the MSO may handle on behalf of the healthcare facility include budgeting, scheduling, human resources, facility maintenance, medical billing management services, information technology (IT) services (healthcare IT service management), and more.
Preparing for and negotiating an MSA can be a long and detailed process to ensure fairness, clear guidelines, and alignment between the parties involved. An experienced healthcare law attorney can provide invaluable guidance in adhering to regulatory requirements, ensuring compliance with healthcare laws, and drafting a comprehensive agreement that protects the interests of both the healthcare provider and MSO.
An MSA requires a detailed outline of the services to be provided by each party involved in the agreement. Within an MSA, you can likely find a description of the following information:
You may have to negotiate the duration of the agreement and any conditions for early termination. It is crucial to thoroughly review and finalize the terms of the agreement before officially signing it to ensure both parties are aligned on performance standards, financial arrangements, agreement renewal processes, medical management services, and overall expectations and objectives.
An experienced healthcare lawyer can ensure the MSA is fair for both sides and free of errors or provisions that could lead to compliance issues.
Many states, including California, prohibit the corporate practice of medicine by non-licensed individuals or entities. An MSA allows physicians to maintain control over all medical services and clinical decisions while contracting with a separate management company for non-medical business functions. The agreement must clearly define those roles.
California generally prohibits fee-splitting arrangements between healthcare providers and unlicensed individuals or entities. Therefore, the payment terms in the MSA must comply with this law to ensure that the compensation received by the management company is not based on a percentage of medical fees.
The Stark Law, also known as the Physician Self-Referral Law prohibits physicians from referring Medicare or Medicaid patients for designated health services to entities with which the physician (or an immediate family member) has a financial relationship.
In other words, this law aims to ensure that medical referrals are based on patient care needs rather than financial incentives. In California, all MSAs must comply with Stark Law requirements by meeting specific exceptions outlined in the law.
Fenton Jurkowitz Law Group has a team of seasoned healthcare law lawyers who specialize in guiding clients through the management services agreement process, ensuring the above legal considerations, among others, are addressed.
From drafting agreements to adhering to regulatory compliance and handling mediation between parties, our attorneys provide comprehensive support. Connect with a healthcare practice attorney today by filling out our contact form on our website.