MSO Healthcare Models: What a Non-Doctor Can Own

In MSO healthcare structures, a management services organization (MSO) handles the business side of a medical practice, including technology, billing support, marketing, and administrative operations. It typically operates under a management services agreement with a separate medical group owned by appropriately licensed clinicians, keeping business functions and medical decision-making under separate control.

Who Owns What in an MSO Healthcare Structure?

The central distinction in an MSO arrangement is between providing business support and controlling medical practice. The management organization supplies nonclinical infrastructure, while the licensed medical group retains the authority that applicable law reserves for medical professionals.

The arrangement generally looks like this:

These categories are not absolute. For example, an MSO may perform billing administration while the medical group retains final authority over billing policies and charges. Similarly, a management company may coordinate recruitment or payroll without having the legal right to control clinicians' employment decisions.

The distinction matters because a contract labeled "management services" does not automatically make every responsibility appropriate for the MSO. States may examine who actually makes decisions, who can override the physician owner, and whether business arrangements interfere with clinical independence.

A separate question arises when a telehealth practice uses nurse practitioners or physician assistants. Requirements for collaboration agreements concern professional practice and supervision relationships, not the ownership split between an MSO and a medical group.

How the Money Moves Between the MSO and Medical Group

A typical MSO arrangement connects two legally distinct businesses through a management services agreement.

The medical group provides clinical services and collects or is entitled to the revenue associated with those services. The MSO provides agreed business and administrative support and receives a management fee under the contract.

That fee may compensate the MSO for infrastructure, technology, personnel support, management activities, and other services; however, how it is calculated matters because states can restrict fee-splitting and financial arrangements that give non-physicians inappropriate influence over medical practice.

For example, a management fee that changes according to clinical revenue, prescription activity, or patient volume may raise additional legal questions. A fixed fee is not automatically appropriate either, because regulators can examine the substance of the entire relationship.

The management services agreement should clearly establish what the MSO provides, what the medical group controls, how compensation works, and which responsibilities remain with licensed professionals.

There is no universal MSO contract that works in every state. Qualified healthcare counsel must review the ownership structure, management agreement, compensation terms, and clinical responsibilities state by state. This article provides general information, not legal advice.

Oregon Shows Where States Are Heading

Oregon offers a particularly useful example of how state lawmakers are examining relationships between management companies and physician-owned medical practices.

On June 9, 2025, Oregon enacted Senate Bill 951, which became Chapter 295 of Oregon Laws 2025. The legislation strengthened restrictions on management services organizations and professional medical entities, including limitations on ownership, overlapping roles, and interference with medical practice.

The Oregon Legislature's official SB 951 record provides the enacted legislation and legislative history. HB 3410 later amended its ownership and control provisions and was signed on July 24, 2025, so the current statutory language and applicable effective dates must also be considered.

Ownership and Overlapping Roles

Oregon's provisions restrict an MSO and certain associated individuals from holding or exercising prohibited ownership or control over the professional medical entity receiving its management services.

The restrictions go beyond whether a management company formally owns a majority of the medical group. Proxy voting, limits on share transfers, and contractual arrangements that give the MSO de facto control can also be prohibited.

The law also limits situations where individuals serve in roles on both sides of the relationship, subject to specified exceptions. These rules aim to preserve a meaningful separation between the business organization and the entity responsible for medical care.

Decisions That Must Remain With the Medical Group

One of the most consequential features of Oregon's legislation is its attention to actual decision-making authority.

The law addresses inappropriate MSO control over activities including:

• Hiring, terminating, scheduling, and compensating clinicians
• Determining clinical staffing levels
• Setting the amount of time clinicians spend with patients
• Making diagnostic coding decisions
• Establishing clinical standards and policies
• Setting patient billing and collection policies
• Determining charges for medical services
• Negotiating and managing certain payer contracts

These restrictions matter because an MSO can exert influence without formally owning the medical practice. A contract might appear to preserve physician ownership while granting the management company authority over staffing, clinical operations, financial policies, or other decisions that affect care.

Oregon's framework addresses this concern by restricting de facto control, meaning practical control can matter even when the formal organizational chart appears separate.

An MSO may still provide support, advice, and administrative services within the boundaries of applicable law. The critical distinction is whether those services amount to prohibited control over the medical group's operations or clinical decisions.

Contract Restrictions and Effective Dates

SB 951 also addresses certain noncompetition, nondisclosure, and nondisparagement agreements involving medical professionals. Those provisions include exceptions and restrictions that vary by agreement type.

The legislation took effect upon passage in June 2025, although its ownership and control provisions have separate implementation dates:

Subsequent 2025 amendments also addressed particular reorganizations and ownership transfers, making the distinction between existing and newly established arrangements especially important.

The Telemedicine Exception

Oregon's ownership and control provisions contain a specific exception for an entity engaged in telemedicine that does not have a physical location in Oregon where patients receive clinical services.

That exception matters for digital-first healthcare companies, but it should not be read as a blanket exemption from all healthcare, professional licensing, or contractual restrictions. Other portions of the legislation and other applicable laws may still affect the business.

A company serving Oregon patients therefore needs to examine its actual delivery model, physical presence, clinical entity, and business relationships before deciding which restrictions apply.

Oregon illustrates why founders should evaluate MSO structures under the laws of every relevant state rather than assuming that a model used elsewhere will work unchanged.

Do You Need an MSO at All?

One of the most important questions for non-physician telehealth founders is whether they need to establish an MSO and physician-owned medical group in the first place.

The answer depends partly on how the business obtains clinical services and whether it intends to establish its own medical group.

Using an Existing Clinical Network

A founder may build a digital healthcare brand around an existing clinical network rather than forming a separate physician-owned professional corporation.

Under this model, appropriately organized and licensed provider groups deliver clinical services while the brand operates its permitted business functions, patient-facing experience, and technology.

The founder doesn't necessarily need to create a new medical group to launch a telehealth business, but they still need to evaluate the relationships, contractual responsibilities, and state-law requirements.

This approach can work for businesses focused on brand development, patient acquisition, technology, and service operations rather than establishing a separate clinical practice.

Building a Dedicated Clinical Network

A business seeking dedicated provider relationships and a separately organized medical practice may need a more complex structure.

Depending on state law and the intended operating model, that arrangement may involve a physician-owned professional corporation and an MSO owned by non-physician founders.

The advantage is greater flexibility in designing business and clinical relationships, but it also adds organizational, contractual, regulatory, and administrative responsibilities.

Founders considering running a virtual medical practice should therefore distinguish between operating a digital healthcare brand and establishing the clinical entity responsible for care delivery.

A dedicated clinical network also needs appropriate provider coverage. As this guide to building a telehealth provider network explains, serving patients across multiple states requires planning around provider availability and licensure.

How This Choice Relates to Bask Health

Bask Health supports both shared-network and bring-your-own-network approaches, depending on the operating model. Integrated doctor groups are included on every Bask plan as a shared clinical network, allowing founders to build telehealth brands without necessarily establishing a new physician-owned medical group. Businesses seeking to bring their own clinical network and establish exclusive patient and provider relationships can explore the Enterprise plan. Whichever model a brand chooses, Bask can power the website, patient-facing software, and payment technology in the left column of the ownership table. At the same time, clinicians retain control of diagnosis, treatment, and prescribing decisions.

Founders should therefore evaluate the technology model and clinical ownership structure separately before committing to establishing an MSO.

Warning Signs in an MSO Contract

An MSO arrangement deserves closer legal review when its contracts or operations suggest that the medical group exists primarily on paper. The following warning signs do not establish a violation by themselves, but they identify issues founders should investigate before signing.

The physician owner has little real authority. If the physician listed as owner cannot review financial information, access relevant clinical policies, or make decisions reserved for the medical group, the arrangement may not reflect genuine professional independence. Formal ownership should correspond with the authority required under applicable law.

The MSO makes clinical operating decisions. A management company that approves treatment protocols, determines clinician staffing, dictates visit lengths, or controls clinical decision-making may be crossing the boundary between support and medical practice. Oregon's legislation specifically addresses several of these areas.

Stock-transfer provisions undermine physician ownership. Proxy arrangements, replacement rights, or transfer restrictions that effectively let the MSO remove or replace the physician owner at will can create questions about who truly controls the practice. The precise language and permitted exceptions matter.

Management fees track clinical activity too closely. Compensation that rises or falls with prescriptions, treatment volume, or clinical revenue may attract scrutiny under applicable fee-splitting or professional practice restrictions. Founders should have healthcare counsel evaluate the entire financial arrangement rather than relying on a formula described as standard.

Providers are not appropriately licensed where patients receive care. The business structure does not eliminate professional licensing requirements. HHS guidance on licensing across state lines explains that requirements vary by state and may involve full licensure, interstate compacts, temporary practice provisions, or telehealth registration pathways. Verify the patient's location, and ensure providers have the appropriate authority to deliver care under the applicable rules.

FAQs

What Does MSO Stand for in Healthcare?

MSO stands for management services organization. It is a business entity that provides administrative, operational, and technology services to a healthcare practice, typically under a management services agreement.

What Is a Friendly PC?

A friendly PC is an informal industry term for a physician-owned professional corporation that contracts with an MSO for business services. The physician-owned entity remains responsible for medical practice and professional decisions, subject to applicable state law.

Can a Non-Physician Own an MSO?

Generally, yes. A non-physician may own a management services organization that provides permitted business support to healthcare practices. However, owning an MSO does not automatically grant authority to own or control a medical practice, and those restrictions vary by state.

Does Every Telehealth Company Need an MSO?

No. A telehealth brand that works with an existing clinical network may not need to establish its own MSO and physician-owned medical group. Businesses that create dedicated clinical entities may need a different structure, depending on their ownership model and the laws governing the jurisdictions where they operate.

References

1. Oregon State Legislature. (2025). SB 951, 2025 regular session. https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/SB951
2. U.S. Department of Health and Human Services. (2025). Licensing across state lines. https://telehealth.hhs.gov/licensure/licensing-across-state-lines