Texas Management Services Agreement Guide: Fees That Avoid Patient Solicitation Risk and Terms That Respect Physician Control

How to Price the Management Fee

The risk in Texas comes from the Patient Solicitation Act, which makes it a misdemeanor to offer or accept remuneration for securing or soliciting patients, and from a Medical Practice Act provision making it an offense for a physician to pay anyone for securing or soliciting patients. A fee for space, staff, billing, technology and administration is lower risk than a fee that pays the management company for lead generation or marketing results. Practitioner guidance recommends fair-market-value fees and caution with fees at the upper end of a percentage range, which is a rule of thumb and not law. We use a fixed monthly fee set in advance for defined services.

What the Practice Must Keep

The Business Organizations Code bars one profession from controlling another's clinical authority through agreements, bylaws, directives, financial incentives or other arrangements, and physicians must organize and control a physician-owned professional association. The agreement keeps every clinical decision, protocol and prescribing decision with the physician and says the management company has no authority over them.

Terms to Avoid

Avoid a fee that moves with marketing results or patient counts, any payment framed as compensation for securing patients, MSO authority over clinical decisions or protocols, and any term that lets the management company direct the physician. Texas courts reached a corporate practice result in Flynn Brothers v. First Medical Associates (1986), where lay promoters took a large share of a physician's profits and controlled the practice, which we read through secondary sources.

Term, Records and Departing Clinicians

Senate Bill 1318 applies to covenants entered into or renewed on or after September 1, 2025. A physician non-compete must allow a buyout no greater than the physician's total annual salary and wages, may not exceed one year or a five-mile radius, must be conspicuous and in writing, must preserve access to patient lists and records and is void if the physician is involuntarily discharged without good cause. The statute says administrative management is not the practice of medicine for this purpose. Our template does not ask employed clinicians for non-competes.

Filings, Notices and Watch Items

We found no Texas transaction notice law, and bills that would have required ownership and control reporting did not pass. Texas Medical Board cosmetic delegation rules moved in January 2025, so agreements that cite older rules should be updated. The Legislature does not meet in regular session in 2026, and the next chance for new structure rules is the 2027 session.

Drafting Checklist

• Fee: fixed monthly amount for space, staff, billing, technology and administration.
• No solicitation pay: nothing paid for securing or soliciting patients.
• Clinical control: every clinical decision with the physician.
• No direction: the MSO cannot direct the physician through agreements or incentives.
• Non-competes: none for employed clinicians, or compliant with the 2025 limits if used.
• Delegation: cites the current Medical Board rules.

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.