One of the most frequently asked questions at our medical spa in IV hydration clinic practice is this: Can a medical practice be an MSO? Well, it’s like saying an orange be a banana. But anyway.

I’m Michael H. Cohen, founding attorney, Cohen Healthcare Law Group. We help healthcare industry clients, just like you, navigate the complex terrain of healthcare and FDA law so you can grow, launch, scale your healthcare venture.

The first thing to know is that when a healthcare or health and wellness venture interacts with clinical staff like physicians or even nurses, it’s best to respect the core of practice of medicine prohibition. This means separating the chicken from the egg. Oh, what a metaphor, the clinicians from the MSO.

Elsewhere on our channel, we talk extensively about the MSO model, flow of payments, best practices and arrangements, and how to help mitigate corporate practice of medicine risk. Another risk we talk about is that of stark and anti-kickback enforcement.

The MSO model that is separating the MSO from the clinical side, the management from the practice, works pretty well because it involves these two different sets of players, the admin and the clinical side of the Med SPA or wellness or iv hydration venture. The clinicians normally are housed within a professional medical corporation, or maybe it’s a professional nursing corporation or similar entity, while the MSO can be a general corporation and LLC, and there’s this management services agreement between them which specifies the details of the arrangement. And so, the medical practice is not an MSO.

But having said that, a physician or nurse can be both a shareholder in the professional medical corporation and the MSO. Although here, watch out for anti-kickback considerations when these clinicians have multiple roles. So, if the clinician has an MSO role, that should be administrative and not medical, not clinical, and that MSO roles should be compensated at fair market value.

If you have questions, give us a ring. We’re here to help and we want to support you on your journey to business success.