Hawaii Management Services Agreement Guide: The Practice as the MSO's Customer
Hawaii's professional corporation act bars a practice from taking a management or member role in an enterprise outside its articles, so the practice should be the MSO's customer and not its manager.
Key Highlights
- Section 415A-5 lets a professional corporation be a promoter, partner, member or manager only of an enterprise engaged only in professional services or business permitted by its articles.
- The physician practice act has no express fee-splitting ground, and a search summary that cited one was wrong.
- The discipline statute covers employing anyone to solicit patients and knowingly permitting an unlicensed person to perform licensed activities.
- Senate Bill 3175 of 2026 would require 180 days' notice of material health care transactions, and we could not confirm its status.
How to Price the Management Fee
The physician practice act has no express fee-splitting ground and we found no authority on percentage fees. The AMA standard applies only indirectly through the ethics ground. We use a fixed fee for defined services, and the practice buys services from the MSO and does not take a share of it.
What the Practice Must Keep
The practice is a customer of the MSO and not its manager or member, unless its articles permit that business, and clinical decisions, telehealth evaluations and prescribing stay with a Hawaii-licensed physician. The telehealth statute says issuing a prescription based solely on an online questionnaire is not an acceptable standard of care.
Terms to Avoid
Avoid giving the practice a management or member role in the MSO, hiring anyone to solicit patients and any arrangement that lets an unlicensed person perform licensed activities.
Term, Records and Departing Clinicians
Hawaii bans non-competes only for employees of technology businesses, so physician covenants face a reasonableness test, and we do not use them for employed clinicians.
Filings, Notices and Watch Items
Existing transaction review covers hospital acquisitions with 90 days' notice. Senate Bill 3175 as introduced covers material transactions involving a physician organization or provider group, including change of control, governance or material influence, with 180 days' notice, and its last status we found was referral to committees in February 2026.
Drafting Checklist
- Fee: fixed for defined services.
- Practice role: customer of the MSO, not manager or member.
- Prescribing: Hawaii-licensed physician, no questionnaire-only.
- Solicitors: no one hired to solicit patients.
- Watch: Senate Bill 3175.
How We Draft It
Patients pay the physician-owned practice, the practice pays the management company a fixed monthly fee under the agreement, and the management company pays MedGrid a fixed monthly retainer for consulting. The management company never practices medicine, and the agreement never moves a clinical decision to it. Our template follows the same flat-fee design in every state, with the state-specific limits below layered on top.
Disclaimer
This article is general educational information, not legal advice. Management agreement rules change and differ by state, and this summary draws on our published state guide, parts of which rest on secondary sources, so have health care counsel in the state review any agreement before you sign.
MedGrid MSO provides management services to independently owned practices; it does not practise medicine and does not direct clinical decisions. Requirements vary by state and by service, and change over time — nothing on this page is legal or medical advice. Talk to us or your own counsel before making a structural decision for your clinic.