Management Services Organizations (MSO) & Understanding the Business Structures Behind Modern Telehealth

MSOs are not Group Practices. Group Practices are not MSOs. And many clinicians were never taught the difference.

One of the biggest sources of confusion in modern healthcare is that many clinicians assume MSOs and group practices are basically the same thing. They are not.

A true Management Services Organization (MSO) is not a healthcare practice. It is an administrative support organization. An MSO may help healthcare practices with things like billing, credentialing, scheduling, marketing, technology infrastructure, payroll support, compliance education, office operations, and other business or administrative functions—but the MSO itself is not supposed to function as the entity practicing medicine.

A group practice, on the other hand, is a healthcare delivery organization. The group practice directly provides clinical services through licensed clinicians, bills for healthcare services, manages patient care delivery, and functions as the actual medical or behavioral healthcare provider organization.

In many ways, a group practice can perform many of the same operational activities an MSO can perform. A group practice may handle its own billing, credentialing, scheduling, payroll, marketing, compliance systems, and administrative operations internally.

But the reverse is not true.

A true MSO cannot simply become the healthcare practice itself while continuing to call itself “just an administrative company.” The moment an organization starts functioning as the entity controlling healthcare delivery, medical operations, clinical workflows, prescribing structures, treatment oversight, or patient care systems, the conversation starts shifting away from administrative support and toward healthcare operational control.

And honestly, this is where many providers start getting confused in the modern telehealth environment because, increasingly, some organizations market themselves as platforms, provider support companies, administrative partners, “practice enablement” organizations, or healthcare infrastructure companies, while operating much more like centralized healthcare delivery organizations.

That does not automatically mean anything improper or illegal is occurring.

Many large healthcare organizations operate perfectly legitimate group practice or MSO structures. But providers should understand that a true MSO supports the practice. It does not quietly become the practice while pretending it technically isn’t.

Why Providers Are So Confused Right Now

The confusion exists because modern telehealth and behavioral healthcare are increasingly built on layered business structures involving:

• management companies,

• administrative entities,

• group practices,

• payer contracting organizations,

• contractor relationships,

• staffing entities,

• and technology platforms

And when these things are all stacked together, it can become extremely difficult to untangle.

Most healthcare providers were never taught:

• business ownership,

• reimbursement systems,

• employment classification,

• payer contracting,

• operational healthcare infrastructure,

• MSO structures,

• or Corporate Practice of Medicine concepts.

Graduate education teaches clinicians how to diagnose and treat patients. It rarely teaches them how modern healthcare businesses actually function. That educational gap matters because providers may enter operational arrangements believing they are “building their own practice,” “working independently,” or “being their own boss” without fully understanding the structure they are operating inside.

And honestly, that is not necessarily the provider’s fault. Most clinicians did not go to graduate school expecting they would someday need to understand:

• venture-backed telehealth infrastructure,

• healthcare labor classification,

• MSO structures,

• payer contracting entities,

• or Corporate Practice of Medicine doctrines.

Why Corporate Practice of Medicine (CPOM) Matters

One reason these distinctions matter so much is because many states maintain some form of Corporate Practice of Medicine (CPOM) doctrine.

While the laws vary significantly by state, the basic idea is relatively simple: non-clinicians generally should not directly control medical decision-making. Historically, these rules developed because lawmakers and regulators worried that corporations primarily driven by financial incentives could eventually exert too much influence over:

• patient care,

• prescribing,

• treatment decisions,

• staffing,

• or clinical judgment.

That is one of the reasons Management Services Organizations became common in healthcare. A properly structured MSO allows administrative and operational support services to exist without the MSO itself functioning as the entity practicing medicine.

In theory, the separation works like this:

• the healthcare practice controls patient care,

• and the MSO supports the business operations around the practice.

Simple enough, right?

The problem is that modern healthcare infrastructure has become increasingly complicated.

Some organizations now market themselves primarily as platforms, technology companies, administrative partners, directories, or “practice enablement” organizations, while operationally functioning much more like centralized healthcare delivery systems.

That does not automatically mean the structure is improper or illegal. Many large organizations operate sophisticated MSO and group practice structures lawfully.

But it does explain why regulators and courts are increasingly paying attention to questions like:

• Who actually controls the practice?

• Who controls workflows?

• Who controls reimbursement systems?

• Who controls patient access?

• And operationally, who is really directing healthcare delivery?

The ApolloMD litigation in Oregon is one high-profile example of these broader concerns involving management structures and physician control.

ApolloMD Oregon Litigation:https://law.justia.com/cases/oregon/court-of-appeals/2024/a178856.html

The lesson for providers is not “MSOs are bad,” it's that providers should understand the actual operational structure they are joining rather than relying solely on branding language.

How to Know the Operational Structure

One major source of confusion is the existence of organizational NPIs (NPI Type 2).

Many providers mistakenly assume:

“If a company has an NPI2, it must be a medical group practice.”

That is not true.

Many legitimate non-clinical healthcare-adjacent organizations maintain NPI2 structures for administrative purposes. Billing companies, revenue cycle management organizations, laboratories, healthcare consultants, administrative support companies, and other operational vendors may all maintain organizational NPIs tied to non-clinical taxonomies.

For example, an administrative support company providing billing, credentialing, consulting, or revenue cycle management services may appropriately maintain an NPI2 under an “other administrative services” taxonomy in order to function as a third-party biller with certain payers or within certain state systems. That does not automatically make the company a healthcare practice or group medical organization.

The existence of an NPI2 alone is not the issue.

The important questions are:

• What taxonomy is attached to the NPI?

• What services are actually being billed?

• Who owns the payer contracts?

• Who controls reimbursement flow?

• Who controls clinical workflows?

• Who controls patient care?

• And operationally, is the organization supporting healthcare delivery—or functioning as the healthcare delivery organization itself?

Because those are very different structures, even if the branding language surrounding them sometimes sounds similar.

And truthfully, checking an organization’s NPI2 taxonomy before signing a contract is not a bad habit for providers to develop. It does not tell you everything about the structure, but it can help providers better understand what type of organization they may actually be entering into business with.

Supporting a Practice vs. Becoming the Practice

This is where the conversation starts getting blurry. A legitimate MSO helps practices operate. It does not quietly become the practice while pretending it technically isn’t.

One of the simplest ways to understand the difference is to ask a very basic question:

What is the company actually selling?

A billing company sells billing services.

A credentialing company sells credentialing services.

An IT company sells technology services.

A marketing company sells marketing services.

A healthcare practice or group practice, however, sells healthcare.

That distinction matters.

A traditional administrative company may financially benefit when providers see patients, but the administrative company itself is not functioning as the entity delivering psychiatric evaluation, therapy, diagnosis, prescribing, or clinical treatment. The healthcare practice still fundamentally carries responsibility for:

• the patients,

• the clinical procedure and policy,

• the treatment decisions,

• and the healthcare delivery process itself.

  
  

The administrative company supports the practice from the outside.

But when an organization’s primary revenue-generating product is healthcare itself—and clinicians are functioning inside company-controlled operational infrastructure—the conversation starts becoming very different.

Because at some point, providers have to ask themselves a very uncomfortable question:

Is the company selling my clinical labor as its primary product?

Remember, MSOs and administrative-only companies do not sell healthcare or direct patient care services; group practices do.

This is not mean all large-scale telehealth organizations are functioning improperly or illegally. Many legitimate group practices and healthcare organizations operate centralized systems lawfully and transparently.

The problem is that modern healthcare companies' marketing uses very similar language, and to clinicians who were never taught healthcare business structures, those phrases can all sound essentially the same. They are not.

Again, this is why providers should start paying attention not only to marketing language, but also to operational structure before signing contracts.

One practical place to start is checking:

• the organization’s NPI Type 2 taxonomy,

• who owns the payer contracts,

• who bills for healthcare services,

• who controls reimbursement flow,

• whether the organization functions operationally as an administrative support company or as the healthcare delivery organization itself,

• and perhaps most importantly: who is actually hiring who?

In other words:

• Are you an independent business hiring outside administrative support?

  or

• Is the company effectively hiring you to deliver the healthcare services that generate its revenue?

  
  

That distinction may sound subtle, but operationally it can create very different expectations regarding autonomy, patient ownership, workflow control, business independence, and long-term leverage within the relationship.

The goal is not necessarily to avoid one structure or another.

The goal is to understand what structure you are actually entering.

None of this means providers should automatically avoid:

• MSOs,

• telehealth platforms,

• group practices,

• contractor arrangements,

• or large healthcare organizations.

  
  

Many clinicians are perfectly happy inside structured systems with centralized administrative support, while others strongly prefer true operational independence and direct ownership over their practice infrastructure.

Neither approach is inherently right or wrong.

The point is transparency.

Providers deserve to understand:

• what type of organization they are joining,

• how the structure actually functions,

• who controls the operational infrastructure,

• and what level of independence they realistically have inside the arrangement.

Because modern healthcare has become extraordinarily good at making very different business models sound almost identical in marketing copy. And honestly, some of the frustration providers experience later may come less from the structure itself and more from not realizing what structure they were actually entering in the first place.

A properly structured MSO can provide extremely valuable support to healthcare practices.

Providers simply need to understand the difference between:

a company supporting a healthcare practice

and

a company functioning as a healthcare practice.

Those are not the same thing.

And knowing the difference before signing the contract may save providers a great deal of frustration later.

Sources:

ApolloMD Oregon Litigationhttps://law.justia.com/cases/oregon/court-of-appeals/2024/a178856.html

American Medical Association – Corporate Practice of Medicine Overviewhttps://www.ama-assn.org/practice-management/private-practices/corporate-practice-medicine-cpom

California Medical Board – Corporate Practice of Medicine Doctrinehttps://www.mbc.ca.gov/Licensing/Physicians-and-Surgeons/Practice-Information/Corporate-Practice.aspx

This article is intended for educational and informational purposes only and does not constitute legal, tax, employment, reimbursement, regulatory, financial, or compliance advice. The information presented reflects general industry commentary, analysis, opinion, and discussion regarding evolving healthcare business models, operational structures, reimbursement systems, workforce classification issues, and healthcare infrastructure trends.

The organizations, platforms, and companies referenced in this article are discussed solely as examples within broader industry conversations and should not be interpreted as allegations of wrongdoing, illegal conduct, fraud, regulatory violations, or improper business practices. References to specific companies, policies, organizational structures, litigation, or publicly available reports are included for commentary, educational discussion, and analytical purposes only.

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