Washington Management Services Agreement Guide: Anti-Rebate Law, Control Risks and the 2027 Non-Compete Ban

How to Price the Management Fee

Chapter 19.68 RCW bars licensees in medicine, dentistry and pharmacy from paying or receiving rebates, commissions, unearned discounts or profits for referrals or in connection with care, and requires charging only for services actually rendered. We found no Washington statute, rule or opinion approving or prohibiting a percentage-of-revenue management fee. A law-firm blog says courts look at substance, MSO control and the payment scheme and that fees should be fair market value, which is risk guidance and not law. We use a fixed fee for defined services.

What the Practice Must Keep

The Medical Commission's guideline says directors should ensure clinicians exercise independent clinical judgment and are not influenced by financial interests. The practice keeps marketing and fee-setting decisions, its payer contracts, its leases and its clinical decisions, because the same blog says an MSO should not control marketing, fee-setting or payer contracts, share in profits or hold the practice's leases.

Terms to Avoid

Avoid a profit share, MSO control of marketing, fee-setting or payer contracts, the MSO holding the practice's leases, excessively long agreements and any payment connected to referrals. The Commission warns practitioners to be wary of arrangements with unlicensed persons because of aiding unlicensed practice, corporate practice and fee-splitting risks. The 2026 bill to codify the doctrine, 2SSB 5387, did not pass, and it would have barred licensees from taking substantial compensation from a contracted MSO.

Term, Records and Departing Clinicians

ESHB 1155, signed March 23, 2026 and effective June 30, 2027, voids all non-competes including those already signed, with exceptions for sale of a business or an interest of at least 1% and for franchises, allows non-solicits up to 18 months for customers with a direct relationship and carries a penalty of the greater of damages or $5,000 plus fees. Until then, the existing salary thresholds apply. Our template does not use non-competes for employed clinicians.

Filings, Notices and Watch Items

HB 2548, signed March 25, 2026 and effective June 11, 2026, requires 60 days' notice to the Attorney General of changes of majority ownership or control. A provider organization is an entity representing seven or more providers in carrier contracting, so a single small cash-pay clinic and its MSO likely falls outside, which is our inference. Filing fees run $2,500 to $25,000 and penalties up to $200 a day. The statute does not mention MSOs.

Drafting Checklist

• Fee: fixed for defined services, nothing connected to referrals.
• No profit share: the MSO does not share practice profit.
• Control: marketing, fees and payer contracts stay with the practice.
• Leases: held by the practice.
• Term: not excessively long.
• Non-competes: none, and the 2027 ban applies to all.
• Notice: check HB 2548 for any ownership or control change.

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.