As reviewed in a previous Holland & Knight alert (see “Federal Bankruptcy Court Stays Envision Healthcare Litigation in California” Aug. 3, 2023), the Friendly PC Model allows medical groups and physician organizations to access affordable capital (whether from private equity (PE), other non-physician investors or lenders) and provide equity-based compensation packages for their nonclinical personnel, while also allowing clinicians to focus on providing high quality care, all in compliance with a state’s Corporate Practice of Medicine (CPOM) prohibitions. Through the use of a contractual arrangement – the management services agreement (MSA) – the management services organization (MSO) provides nonclinical/administrative services (e.g., space, equipment, back-office personnel and support, etc.) to the PC in exchange for a fee that is commensurate with the value of the services furnished.
Authors: John C. Saran, Kenneth Jonathan Yood, and Shalyn Watkins
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Last updated: July 26, 2024