North Dakota Management Services Agreement Guide: Distributions, Employment Exceptions and Void Non-Competes
North Dakota's fee-splitting ground covers compensation for services not personally rendered or for referrals but preserves lawful distributions of professional corporations, and non-competes in employee-physician agreements are void.
Key Highlights
- The discipline statute covers paying or receiving compensation for medical services not personally rendered or for referrals but does not affect lawful distributions of professional corporations.
- A 1990 Attorney General letter says only professional corporations may employ physicians, and the 2023 law lets nonprofits and charitable trusts employ them under a contract preserving independent judgment.
- A non-compete in an employee-physician agreement is void except in sale or owner-exit contexts.
- A static online questionnaire or audio conversation alone does not meet the standard of care.
How to Price the Management Fee
The discipline statute covers paying or receiving any fee, commission, rebate or other compensation for medical services not actually or personally rendered or for patient referrals, with a statement that it does not affect lawful distributions of professional partnerships, corporations, LLCs or associations. We found no rule on percentage fees, so we use a fixed fee for defined services.
What the Practice Must Keep
The practice is owned entirely by licensed physicians, since the professional organizations act gives physicians no lay minority ownership option, and it keeps clinical decisions and records. A physician assistant must practice at a licensed facility, a physician-owned facility or practice or a board-approved site.
Terms to Avoid
Avoid the management company employing physicians, placing a physician assistant in a non-physician-owned site, referral-linked pay and branding that could raise the false or assumed name ground, which is unverified for registered trade names.
Term, Records and Departing Clinicians
North Dakota voids restraints on a lawful profession, with exceptions for sale of goodwill and owner dissociation or sale of an interest, so a non-compete in an employee-physician agreement is void.
Filings, Notices and Watch Items
We found no North Dakota transaction notice law. The Nursing Board's December 2024 IV guidance requires a prescriber's initial documented history and physical and a client-specific plan before IV therapy.
Drafting Checklist
- Fee: fixed for defined services.
- Employment: physicians employed by the professional corporation, never the MSO.
- Physician assistants: only at permitted sites.
- Records: provided on request.
- Non-competes: none in employee agreements.
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.