Vermont Management Services Agreement Guide: Written to Fit the Nonclinical Services Safe Harbor
Vermont's Act 133 protects nonclinical management services if a licensed provider retains ultimate responsibility or approval, so the agreement lists services in that category and keeps clinical decisions with the practice.
Key Highlights
- Act 133 bars private equity groups and hedge funds from controlling clinical standards, staffing levels, records, clinical hiring and firing, payer contracting, prices, coding and billing and equipment selection.
- Its safe harbor allows unlicensed entities to provide nonclinical management, administrative or business services if a licensed provider retains ultimate responsibility or approval and the services are not de facto control.
- Every management services organization must file with the Green Mountain Care Board by March 1, 2027.
- A June 2026 statute voids most provider non-competes and preserves restrictions tied to nonclinical business support services.
How to Price the Management Fee
The discipline statute covers dividing fees for bringing or referring a patient, and we found no authority on percentage fees. Act 133 lists setting prices and coding and billing among powers a private equity or hedge fund entity may not hold. We use a fixed fee for nonclinical services.
What the Practice Must Keep
The agreement lists only nonclinical management, administrative and business services and says a licensed health care provider retains the ultimate responsibility for or approval of the decisions they touch. The practice keeps clinical standards, staffing levels, records, clinical hiring and firing, payer contracting, prices, billing and equipment selection.
Terms to Avoid
Avoid terms giving a private equity or hedge fund owner or any MSO those powers, any de facto control that affects clinical decision making or the nature or quality of care, and branding that suggests the MSO provides medical services. The enacted Act dropped the introduced bill's corporate practice ban and MSO contract rules.
Term, Records and Departing Clinicians
The June 2026 statute, for contracts on or after July 1, 2026, voids provisions restricting practice in any geography after a relationship ends, limiting notice to former patients, restricting disparagement or requiring out-of-state litigation, and it preserves restrictions that limit a provider who contracts with a third-party company for nonclinical business support services from opening a business within a territory supported by a different such company. It has no owner exception.
Filings, Notices and Watch Items
By March 1, 2027, each health care facility and management services organization must file with the Green Mountain Care Board, with an attestation of no private equity or hedge fund interest if none, and penalties for knowing failure to report run up to $50 a day, capped at $10,000 a year. Open questions include whether a physician office is a health care facility and whether an out-of-state MSO must report.
Drafting Checklist
- Services: nonclinical management, administrative and business only.
- Approval: a licensed provider retains ultimate responsibility.
- Decisions: clinical standards, staffing, records, hiring, payer contracts, prices and billing stay with the practice.
- Reporting: file by March 1, 2027.
- Non-competes: none, except the permitted territorial carve-out.
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.