Virginia Management Services Agreement Guide: Exclusive Physician Control and No Non-Competes After July 2026
Virginia's Attorney General opinion approved physician employment only where physicians exercise exclusive control over decisions requiring professional medical judgment, and non-competes with health care professionals are barred from July 1, 2026.
Key Highlights
- A 1995 Attorney General opinion requires physicians to keep exclusive control over decisions requiring professional medical judgment.
- The referral fee statute bars sharing a fee with another physician in return for a referral, and we found no authority on percentage management fees.
- Records must be kept six years after the last encounter.
- House Bill 627, effective July 1, 2026, bars non-competes with health care professionals, with sale-of-business and limited other exceptions.
How to Price the Management Fee
Virginia makes it a Class 1 misdemeanor for a physician to share a professional fee with another physician in return for a referral, and commentary notes the statute reaches splitting among professionals. We found no statute, Board rule or opinion banning or capping percentage-of-revenue management fees. We use a fixed fee for defined services that do not pay for referrals.
What the Practice Must Keep
Physicians keep exclusive control of decisions requiring professional medical judgment, which is the standard in the 1995 opinion, and prescribing keeps a bona fide practitioner-patient relationship with a history, discussion of risks and benefits, an appropriate exam and follow-up.
Terms to Avoid
Avoid any term that moves control of professional judgment to the MSO, referral-linked pay and non-competes with clinicians employed after July 1, 2026. In Parikh v. Family Care Center (2007) the Court held a non-professional corporation cannot engage in the practice of medicine, without deciding the broader question.
Term, Records and Departing Clinicians
House Bill 627, effective July 1, 2026, bars non-competes with health care professionals licensed by the boards of medicine, nursing, counseling, optometry, psychology or social work. It is not retroactive, and it has exceptions for sale-of-business covenants, narrow customer non-solicits that cannot stop a clinician from telling patients where they now practice, and recovery of recruitment costs, with a $10,000 civil penalty per violation. Records must be kept six years after the last encounter.
Filings, Notices and Watch Items
We found no Virginia transaction notice law. A 2026 bill to study private equity did not advance.
Drafting Checklist
- Fee: fixed for defined services, no referral pay.
- Judgment: exclusive physician control.
- Prescribing: bona fide relationship.
- Records: six years.
- Non-competes: none after July 1, 2026.
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.