Understanding MSOs
An MSO, or Management Service Organization, handles all administrative work for medical spas. Since medical spas must be majority-owned by physicians, MSOs provide a solution for nurses, investors, or laypersons who want to participate in the business. An MSO can be 100% owned by non-medical professionals and manages the non-clinical aspects of the practice.
Administrative Functions
MSOs handle everything from basic office supplies to EMR systems, forms, website management, and staff hiring. They manage the business operations while staying clear of clinical responsibilities. Through a Management Services Agreement (MSA), MSOs typically receive 40-60% of the medical spa’s gross monthly revenue for their administrative services.
Common Misconceptions
Many people confuse MSOs with the medical spa itself. It’s crucial to understand that these are separate entities – the MSO handles management while the medical spa provides clinical services. MSOs should include terms like “consulting,” “management,” or “administration” in their titles to maintain clear distinction. Like an agency, one MSO can serve multiple medical spas through separate contracts.
Legal Risks and Compliance
Operating without an MSO often indicates incorrect medical spa formation and potential violation of corporate practice of medicine laws. These laws prevent corporations from driving medical decisions, which should be made by physicians. Non-compliance affects both physicians and non-physicians involved in the practice.
Operational Structure
MSOs can handle advertising, hiring non-clinical staff, and administrative tasks. However, clinical staff must be hired by the medical spa directly. This separation maintains compliance with medical practice regulations and ensures proper oversight of patient care.
Digital Evolution and Privacy
Modern MSOs often manage electronic medical records (EMR) systems through contracts with providers like Epic or Cerner. They require limited access for billing and administrative functions while maintaining strict privacy and security protocols to protect patient information.
Legal Considerations
For new medical spa owners, forming an MSO is typically non-negotiable, with few exceptions. Special attention must be paid to kickback laws and ownership disclosure requirements, ensuring patients are informed consumers and medical decisions are made in their best interest.
