New Mexico Management Services Agreement Guide: A Narrow Fee-Splitting Definition and the Lay-Control Limit
New Mexico defines prohibited fee splitting narrowly around referral compensation, which is the most MSO-friendly fee definition in this series, but lay control of medical judgment is still barred.
Key Highlights
- Prohibited fee splitting is unearned consideration as compensation or inducement for referring patients, regardless of any ownership interest.
- The 1987 Attorney General opinion says a lay-controlled corporation may provide medical services through employed physicians unless it exercises lay control of medical judgment.
- Records must be retained ten years and the patient must receive a written records policy naming the responsible entity, including where an MSO holds the records.
- The Consolidation Oversight Act is hospital- and insurer-centered.
How to Price the Management Fee
Prohibited fee splitting is defined as offering, delivering, receiving or accepting any unearned rebate, refund, commission, preference, patronage dividend, discount or other unearned consideration as compensation or inducement for referring patients, and the Attorney General's opinion says it is limited to conduct in the nature of referral fees. That is the most MSO-friendly fee definition in this series, but a fee that gives the MSO control of clinical decisions is the risk, so we use a fixed fee for defined services.
What the Practice Must Keep
The practice keeps medical judgment and prescribing, with no prescribing without an established relationship and no questionnaire-only models. Where an MSO holds records, the patient receives a written records policy naming the responsible entity, and the practice keeps access.
Terms to Avoid
Avoid giving the MSO control over medical judgment, referral-linked consideration, records that cannot be released and cosmetic communications that do not identify the responsible physician.
Term, Records and Departing Clinicians
Records must be retained ten years, may not be withheld for unpaid bills and require 30 days' notice to patients seen in the prior three years before a sale or closure. A health care practitioner agreements law makes most physician non-competes unenforceable, and we do not use them.
Filings, Notices and Watch Items
The 2025 Consolidation Oversight Act covers hospitals, including contracts with an MSO that provides all or substantially all administrative services under contract with a hospital, and insurer-affiliated acquisitions, and a stand-alone cash-pay clinic MSO is not covered unless hospital- or insurer-affiliated. Bills in 2025 and 2026 that would have restricted MSOs did not advance.
Drafting Checklist
- Fee: fixed for defined services, no referral consideration.
- Judgment: no MSO control of medical judgment.
- Records: written policy, ten-year retention.
- Prescribing: established relationship, no questionnaire-only.
- Communications: identify the responsible physician.
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.