Key Legal Considerations for Dentists Exploring MSO Formation
Jan 10 2024 0

Key Legal Considerations for Dentists Exploring MSO Formation

A Management Service Organization, or MSO, is a business that offers non-clinical and administrative services to support medical practices. Usually, an MSO is structured as a corporation or a limited liability company. When partnering with a physician or medical practice, an MSO remains a separate entity that functions within the terms of an agreed-upon contract. In a contract between an MSO and a doctor or practice, the details must be clear and discuss each party’s responsibilities and obligations including services provided and fees for such services.

Forming an MSO may be the right choice for your purposes whether you are a physician, a non-physician, or if you are considering your MSO to be a hybrid between physicians and non-physicians. It is important that when forming an MSO, everything is done right and by the law. In turn,  it is critical to protect yourself during the MSO formation process. With more than 25 years of experience assisting businesses in the dental industry in California, the Los Angeles MSO attorney at the Leiva Law Firm can offer you trusted legal counsel to help you be successful with your endeavor.

Creating an MSO in California

Key Legal Considerations for Dentists Exploring MSO FormationMSOs can provide many support services that are valuable to medical practices and allow physicians to keep their focus on patient care while knowing that the business side of a practice is running smoothly. Administrative services like billing and payroll, business services like marketing or accounting, and other operational tasks like data analytics are just some examples. 

Any type of business in the healthcare industry is going to have to abide by strict regulations. This is true for MSO formation. Regulatory issues that can come about, if not handled properly, can lead to serious repercussions. Compliance with regulations is critical. This is why when thinking about creating and operating an MSO, doing so with the help of experienced legal counsel is so important. It is imperative that an MSO arrangement be structured carefully to avoid regulatory pitfalls that can be costly or treated with criminal penalties.

For instance, the Stark Law prohibits physicians from making patient referrals to other healthcare providers where a financial relationship exists. In other words, practitioners have to be aware of participating in actions that could be considered as obtaining kickbacks. Penalties for violations of anti-kickback laws can lead to hundreds of thousands of dollars in fines, time in jail, and other professional implications. Other issues and risks with MSOs include fee-splitting and practicing medicine without a valid license.

An MSO can be incredibly advantageous for supporting medical practices and helping them run more efficiently. MSO services can allow for more streamlining of operations which could potentially lead to greater profits for practices. However, there are several legal considerations to be aware of, and the structuring of an MSO and working on an MSO arrangement are complex matters that should be done with the help of a professional who knows the guidelines and laws.

Speak to an Attorney at the Leiva Law

For help with MSO formation in California, please reach out to the Leiva Law Firm by calling (818) 519-4465 to schedule a free consultation.

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