Massachusetts Management Services Agreement Guide: Avoiding Equity, Keeping the Practice Wholly Practitioner-Owned
Massachusetts has no express fee-splitting rule we found, but equity or control in the clinical entity can push a med spa outside the clinic license exemption, and physician non-competes are void.
Key Highlights
- We found no express fee-splitting or referral-fee ground in the Board regulations and no authority on percentage management fees.
- A 2013 DPH advisory, which we read through a summary, says a med spa needs a clinic license unless wholly owned and controlled by its practitioners.
- Physician non-competes are void and unenforceable under G.L. c. 112, section 12X.
- Chapter 343 of the Acts of 2024 defined MSOs for the Health Policy Commission, but a small physician-owned practice and MSO without outside investors appears unlikely to hit the filing thresholds.
How to Price the Management Fee
We found no express fee-splitting ground in the Board regulations and no Massachusetts authority on percentage fees, and the state kickback statute is written around payments by health care insurers. Commentators advise that payment flow to the practice, which then pays the MSO for services without referral-based splitting. We use a fixed fee for defined services.
What the Practice Must Keep
The practice remains wholly owned and controlled by its practitioners, with no equity, option or control in the clinical entity given to the MSO, because that could push a med spa outside the clinic license exemption. Regulations bar delegating medical services to anyone not licensed for them and require records for at least seven years.
Terms to Avoid
Avoid any equity, options or control rights for the MSO in the clinical entity, any investor in the MSO who would make the arrangement look like a significant equity investment, and advertising that does not meet the Board's requirements for name, address and degree.
Term, Records and Departing Clinicians
Physician non-competes are void and unenforceable by statute, so we do not use them. Records are kept at least seven years from the last encounter.
Filings, Notices and Watch Items
The Health Policy Commission reviews material changes on 60 days' notice, with proposed thresholds of $25 million of net patient service revenue for clinical affiliations and a $10 million increase for mergers and acquisitions, and it said it would clarify that the MSO trigger applies to MSOs supporting payer contracting. A small physician-owned practice with an MSO and no outside investor looks unlikely to file, which should be confirmed against the current regulation. A 2026 med spa licensing bill was replaced with a study.
Drafting Checklist
- Fee: fixed for defined services.
- Ownership: wholly practitioner-owned, no MSO equity or options.
- Control: with the practice.
- Records: kept seven years.
- Non-competes: none.
- Notice: confirm the Commission thresholds.
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.