Michigan Management Services Agreement Guide: Fair-Market Fees and the Tripwires Practitioners Warn About
Michigan's fee rule is referral-focused and we found no authority on percentage fees, but practitioners list nonprofessional owners, MSO employment of clinicians, long agreements and above-market fees as tripwires.
Key Highlights
- The Public Health Code makes dividing fees for referral of patients or accepting kickbacks an unethical business practice.
- Practitioner guidance lists tripwires: nonprofessional owners or directors of the practice, the MSO employing licensed staff, MSO branding implying it delivers care, long or irrevocable agreements and above-market fees.
- In Miller v. Allstate (2008) an insurer lacked standing to challenge a provider's incorporation, which means only the Attorney General can.
- Dermatologic lasers require physician supervision under MCL 333.16276.
How to Price the Management Fee
The Public Health Code lists dividing fees for referral of patients or accepting kickbacks as an unethical business practice, a referral-focused rule, and we found no statute or case on percentage-of-revenue fees. Practitioner guidance says compensation to management companies should be fair market value, so we use a fixed fee.
What the Practice Must Keep
The practice employs its licensed clinicians, owns the clinical relationship and keeps clinical decisions, protocols and supervision. Laser procedures must be done under a licensed physician's supervision with consent, with supervision meaning continuous availability of direct communication, scheduled review and predetermined protocol.
Terms to Avoid
Avoid the tripwires practitioners list: nonprofessional owners, officers or directors of the practice, the MSO directly employing or supervising licensed staff, MSO branding that implies it delivers care, long or effectively irrevocable agreements and above-market fees. The Michigan State Medical Society asked the Attorney General in 2023 to investigate MSO structures where physicians own in name only.
Term, Records and Departing Clinicians
Michigan allows reasonable non-competes, including for physicians, and bills to ban them for physicians introduced in 2025 and 2026 had not moved. We do not use them for employed clinicians.
Filings, Notices and Watch Items
We found no Michigan transaction notice law. The professional corporation rules now sit in Chapter 2A of the Business Corporation Act, so older agreements citing the repealed act should be updated.
Drafting Checklist
- Fee: fixed and fair market.
- Employment: the practice employs licensed clinicians.
- Branding: does not imply the MSO delivers care.
- Term: not long or irrevocable.
- Lasers: physician supervision with consent.
- Non-competes: none for employed clinicians.
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.