Management Services Agreement Healthcare: An Overview
As healthcare providers look for ways to streamline operations and improve efficiency, many are turning to management services agreements (MSAs) to outsource non-clinical functions. An MSA is a contractual agreement between a healthcare provider (the client) and a management services organization (MSO) that provides administrative, financial, and operational support services.
MSAs can be a valuable tool for healthcare providers looking to focus on patient care while outsourcing administrative functions. However, there are several considerations to keep in mind when entering into an MSA, especially in the highly regulated healthcare industry.
Key Elements of a Management Services Agreement Healthcare
An MSA typically outlines the services to be provided by the MSO and the compensation to be paid by the client. Services may include billing and collections, human resources management, compliance, IT support, and more. Compensation can be structured as a flat fee or a percentage of revenue generated from the services provided.
It`s important to note that an MSA does not transfer ownership or control of the healthcare facility or practice. The client retains responsibility for clinical decision-making and patient care.
Compliance Considerations
One of the key considerations when entering into an MSA is compliance. Healthcare providers must ensure that the MSO is compliant with all relevant laws and regulations, including HIPAA and Stark Law. Any violations of these laws can result in significant fines and penalties, as well as reputational damage.
To mitigate these risks, providers should conduct due diligence on the MSO prior to entering into an MSA. This may include reviewing the MSO`s compliance program, policies and procedures, and training programs. Providers should also include compliance-related provisions in the MSA, such as requirements for ongoing compliance monitoring and reporting.
Risk-Sharing Arrangements
Another consideration when entering into an MSA is risk-sharing arrangements. Providers may choose to structure the MSA as a shared-risk arrangement, with the MSO sharing in the financial risk and rewards of the practice. This can align the interests of the MSO with those of the provider and encourage the MSO to operate in a financially responsible manner.
However, shared-risk arrangements can be complex, and providers should seek legal and financial advice before entering into such an agreement.
Conclusion
Management services agreements can be an effective tool for healthcare providers looking to outsource non-clinical functions and improve efficiency. However, providers must carefully consider the compliance and financial risks associated with MSAs before entering into an agreement. By conducting due diligence on the MSO and including appropriate provisions in the MSA, providers can mitigate these risks and achieve a successful partnership with the MSO.