prohibit Management Services Organizations from controlling medical practices

 

Management Services Organizations (MSOs) provide administrative and non-clinical support services to healthcare

providers. This bill will ensure that their control does not extend past these duties. MSOs may not:

On behalf of a medical practice, hire or fire physicians and set physician salary levels.

Determine physician clinical work schedules, patient load, or overall staffing levels. MSOs cannot dictate how many

patients a physician must see or how much time can be spent per appointment.

Influence clinical protocols or treatment standards of the medical practice.

Set billing or collection policies, service pricing, or negotiate the practice’s contracts with insurers and payors.

Decisions regarding fees and insurance must be made by practice owners.

 

Medical clinical decisions should be made by licensed practitioners, independent of corporate influence. MSOs offer

administrative and non-clinical support to medical practices; however, if they assume too much control, it will impede

the nature and quality of clinical care delivered. Corporate backing of physician practices, such as private equity (PE)

backing, has been shown to drive up health care costs, with research indicating that PE acquisitions raised prices by

11% in dermatology, while neonatology prices surged by 70%. These increased prices do not always correlate with improved

care quality. By controlling practices via a “friendly” physician owner, MSOs infringe on existing Corporate Practice of

Medicine laws while avoiding repercussions through this loophole. Not only does this affect patients and healthcare

costs, MSO control also adds strain to practitioner workloads, many of whom quit after being affiliated with these

companies.

 

Management Services Organization shall be defined as a business that provides administrative and management support to

other companies.

Medical practice shall be defined as a healthcare facility or organization that provides care to patients.

Physician shall be defined as a licensed medical professional who diagnoses, treats, and prevents illness and injury.

Payor shall be defined as a person who makes a payment to a healthcare provider.

 

This bill does not require funding.

 

The Attorney General’s Office will handle enforcement. Contracts between MSOs and medical entities that violate this act

will be deemed void. Medical licensees injured as a result of a violation of this act may bring an action for damages or

relief against the MSO.

 

MSO restrictions outlined will apply to all new MSO arrangements starting on January 1, 2026.

For preexisting MSO-medical practice arrangements that were already in place, a longer grace period is provided until

January 1, 2029, so that companies can restructure contracts that violate new rules.