In the ever-evolving healthcare industry, non-licensed professionals, such as administrators, executives, and business managers, play crucial roles in managing healthcare facilities and organizations. As these professionals seek to optimize their operations, they may consider entering into what’s called Management Service Agreements (MSAs) with licensed healthcare providers. MSAs can provide significant benefits for both parties involved, but they must be structured carefully and in compliance with applicable laws and regulations to avoid potential legal pitfalls. In this blog post, we’ll delve into what MSAs are, their significance for non-licensed healthcare professionals, and the role of legal counsel in ensuring their proper use.

What are Management Service Agreements (MSAs)?

A Management Service Agreement (MSA) is a contractual arrangement between a licensed healthcare provider and a non-licensed entity or individual. The agreement delegates certain management and administrative responsibilities from the licensed healthcare provider to the non-licensed party. MSAs are commonly used by healthcare facilities, medical practices, and other healthcare organizations to access the expertise of non-licensed professionals while remaining compliant with healthcare regulations.

The Role of MSAs for Non-Licensed Healthcare Professionals:

For non-licensed healthcare professionals, MSAs provide an opportunity to contribute their expertise in areas such as finance, human resources, marketing, and operations, without the need for a medical license. These professionals can assist in enhancing the efficiency and effectiveness of healthcare facilities, allowing licensed healthcare providers to focus more on patient care and medical services.

Benefits of MSAs for Healthcare Organizations:

  1. Expertise and Efficiency: Non-licensed professionals often possess specialized skills in areas beyond medical practice, enabling them to streamline operations, reduce costs, and improve overall efficiency.
  2. Compliance Assistance: A well-structured MSA can help healthcare organizations navigate complex healthcare regulations and ensure that their operations are in compliance with state and federal laws.
  3. Focus on Patient Care: By delegating administrative tasks to non-licensed professionals, healthcare providers can devote more time and resources to patient care and medical services.

The Importance of Legal Counsel in MSA Drafting and Implementation:

MSAs in the healthcare industry are subject to strict regulatory scrutiny due to the sensitive nature of patient care and the potential for abuse or fraud. Engaging a knowledgeable healthcare attorney is essential to ensure that MSAs are drafted and implemented properly. Here are several ways in which legal counsel can assist in the MSA process:

  • Contract Review and Drafting: A healthcare attorney can thoroughly review and draft the MSA to ensure that it aligns with the specific needs and goals of the healthcare organization. They will also include provisions that comply with relevant healthcare laws and regulations, safeguarding the interests of both parties.

Compliance with Anti-Kickback Laws:

MSAs must adhere to federal and state anti-kickback laws, which prohibit the exchange of remuneration for referrals of healthcare services. A skilled attorney can structure the MSA to avoid any potential violations of these laws and protect the parties from legal consequences.

  • Stark Law Compliance: The Stark Law prohibits self-referrals for certain designated health services, unless specific exceptions apply. Legal counsel can navigate the complex regulations and implement necessary safeguards in the MSA to meet Stark Law requirements.
  • Data Privacy and Security: Healthcare organizations must safeguard patient data in accordance with the Health Insurance Portability and Accountability Act (HIPAA). An experienced attorney can incorporate data privacy and security provisions in the MSA to protect patient information and mitigate the risk of breaches.
  • Dispute Resolution: In the unfortunate event of a disagreement or dispute between the parties, the MSA should include provisions for dispute resolution. Legal counsel can devise effective mechanisms for resolving conflicts, potentially avoiding costly litigation.

Management Service Agreements (MSAs) present significant opportunities for non-licensed healthcare professionals to contribute their expertise to the healthcare industry. However, the complexity of healthcare regulations requires careful drafting and implementation of MSAs to avoid potential legal pitfalls. Seeking the guidance of a knowledgeable healthcare attorney is crucial for healthcare organizations and non-licensed professionals to ensure that MSAs comply with applicable laws and regulations, protect the interests of both parties, and ultimately enhance the quality of patient care and medical services.

This blog post is written by an attorney at Cooper & Huber, LLP.  It is for general educational purposes only and is not intended as legal advice or a solicitation for services. We hope it helps you or empowers you to seek next steps in your legal matters. Cooper & Huber attorneys handle an array of personal and business law matters throughout California.  You can contact us at or 213.423.1163.

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