What Is An MSO?

A Management Services Organization (MSO) is an administrative vehicle used to manage healthcare practices.

An MSO has many unique benefits to provide to a group of physicians or providers, allowing mergers with other groups and unprecedented growth. The MSO is essentially an administrative aspect of the provider group that is paid a fee for managing the non-clinical functions of the provider group. The MSO concept became popular in the 1990s with large provider groups being “purchased” by the MSO parent whereby the physicians were put on a guarantee as a condition of the purchase agreement. The problem was that the physicians reduced their output because the guaranteed salary was detrimental to the growth of the MSO. As such, the majority of the MSO groups from that time period could maintain solvency.

Over the past 10 years, the MSO model has seen significant growth in the medical field. At an initial glance, the MSO can manage a practice’s billing and collections, accounting, legal, IT/EMR infrastructure, equipment leasing, office space leasing, human resources, compliance, marketing, and research. As the MSO accrues more physician groups, there can be an economy of scale where costs are reduced for the MSO to provide its service to the members. The more physicians managed by the MSO, important claims data, outcome research, and even quality can be part of the overall scope. As the MSO grows in time, it can also be used to negotiate payor contracts with specialty markets depending on the number of providers and volume of clinical care.