Due Diligence on Your MSO: 15 Questions to Ask Before You Sign Anything

Choosing an MSO or setup provider is one of the highest-stakes purchasing decisions a clinic owner makes, and it is often made on price, speed and a sales call. The structure the provider builds becomes the thing your bank, insurer, board and any future buyer will read. If it is wrong, the cost shows up months or years later, usually when you can least afford it.

Here are fifteen questions to ask, why each matters and what a clean answer looks like. Put them in writing. If a provider is uncomfortable putting answers in writing, that tells you something. This is part of our series on the MSO model; see how the MSO-PC model works and the three agreements behind it for background.

Ownership and Entity Form

• 1. Who owns the professional entity, and are they licensed in my state?: The owner should be a licensed physician in the form your state requires, not a nominee spread across many filings. Clean answer: one named physician, licensed here, with real involvement.
• 2. How many professional entities does that physician own?: A single physician cannot exercise real authority over dozens of clinics. Clean answer: one physician per PC, one PC per location or state.
• 3. What entity form do you use in my state, and what is the statutory basis?: Ask for the statute or board guidance. A provider who cannot cite it has not checked. See our guide to verifying a state's entity rule.
• 4. Is there any agreement that lets you or your owners replace the physician or restrict a sale?: Stock transfer restrictions and succession agreements make ownership conditional. Clean answer: no agreement that depends on swapping the physician at will, and any transfer terms are narrow and documented.

Fees and Control

• 5. How is the management fee calculated?: A flat, fair-market amount for defined services is the defensible answer. A percentage of collections or profit is the red flag.
• 6. What does the fee cover, and what costs extra?: Scope should be specific. Vague scope hides the real price and the real control.
• 7. Who has final say over hiring, pricing, billing and clinical staffing?: In most strict-CPOM states those belong to the physician-owned entity. If the honest answer is the MSO, that is the pattern regulators and recent legislation target.
• 8. Where does patient revenue land?: It should land in the professional entity's own account. If it goes to the MSO first, the money is traveling the wrong direction.

The Physician Relationship

• 9. How am I connected with my physician, and can I meet them first?: You should be able to speak with the physician before you commit. Clean answer: the physician is licensed in your state, engaged in your clinic and available.
• 10. How is the physician paid?: A flat fee for the role, not a per-chart or percentage amount. Volume-based pay gives a financial reason to sign faster and review less.
• 11. What does the physician actually do, and how often?: Look for written protocols, a chart-review cadence, an escalation path and response times, not just a signature on onboarding day.

Records, Banking and Exit

• 12. Who owns the medical records and the patient list?: The professional entity owns the medical record. The MSO may hold it as a custodian, but should not own it.
• 13. How do I leave, and what happens to the clinic when I do?: Ask about term, termination, notice, transition support and records. An agreement you cannot realistically exit is a control mechanism.
• 14. Who is my lawyer, and did the physician have independent counsel?: The practice should review its agreements with counsel it chose, not counsel the provider supplied. Be wary of a provider who discourages outside review.
• 15. Can I have all of this in writing, and can my own attorney review it before I sign?: A good provider says yes without hesitation.

When to Walk Away

• They cannot or will not tell you who owns the professional entity or what form it takes.
• The fee is a percentage of your revenue or profit.
• The agreements let them replace the physician or block a sale.
• Patient payments go into their account first.
• The physician is unreachable, or one physician sits behind dozens of clinics.
• They pressure you to sign quickly or discourage outside legal review.
• Entity advice arrives without a statute behind it, especially if it contradicts your state's published rules.

Where MedGrid Fits

We would rather you ask these questions of us than skip them. Our structure puts one physician-owned PC per location or state, with revenue landing in the PC's own account, a flat fair-market management fee, separate medical director, management and consulting agreements, and the practice reviewing its agreements with its own independently selected counsel. We connect you with a physician licensed in your state. Hold us to the same questions, ask for the statute behind each entity decision, and bring your own lawyer.

Frequently Asked Questions

• Why does due diligence on an MSO matter so much?: Because the structure is what your bank, insurer, board and a future buyer will examine, and fixing a bad one after you have built revenue on it can mean rebuilding the entity.
• What is the most important question on the list?: Who actually decides: hiring, pricing, billing and clinical staffing. If the answer is the management company, the structure depends on controls that regulators and new laws target.
• Should I hire my own lawyer even if the provider includes legal work?: Yes. Independent counsel is the point. The practice and the physician should review agreements with lawyers they chose.
• What if my current provider fails some of these tests?: Talk to healthcare counsel in your state about amending the arrangement. Many problems are fixable by amendment if caught before a complaint or a sale.
• Is a cheaper provider a red flag?: Not by itself, but a very low price combined with a percentage fee, a fast timeline and no written answers deserves close attention.
• Do these questions apply outside CPOM states?: Many do. Even where non-physician ownership is allowed, who controls clinical decisions, where money goes and how you exit matter for liability, financing and sale.

This article is general educational information, not legal advice. Requirements differ by state and change over time. Have licensed healthcare counsel in your state review any provider's entity structure and agreements before you sign.