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How MSO Partnerships Work in New York : Roles, Risk, and What to Expect

How MSO Partnerships Work in New York : Roles, Risk, and What to Expect

How MSO Partnerships Work in New York : Roles, Risk, and What to Expect

Date

Date:

Dec 30, 2025

Dec 30, 2025

Dec 30, 2025

Time to read

Time to read:

Time to read

5 mins

5 mins

5 mins

Physicians across New York are increasingly approached with MSO partnership proposals, often tied to a practice transition, acquisition, or growth plan. The concept is usually explained in a straight story, however, in real life, it’s much simpler.

An MSO model is an operating structure that separates clinical decision making, which must remain with licensed professionals, from non-clinical business operations that can be run by a business organization. In a compliant model, the MSO doesn't create new clinical obligations for physicians. Its role is operational support under clearly defined agreements. The point is to keep boundaries clear and make operations easier to run and scale.


This is a practical overview of the questions physicians ask most often in New York, especially around responsibility, liability, and what actually changes day to day.


Physicians across New York are increasingly approached with MSO partnership proposals, often tied to a practice transition, acquisition, or growth plan. The concept is usually explained in a straight story, however, in real life, it’s much simpler.

An MSO model is an operating structure that separates clinical decision making, which must remain with licensed professionals, from non-clinical business operations that can be run by a business organization. In a compliant model, the MSO doesn't create new clinical obligations for physicians. Its role is operational support under clearly defined agreements. The point is to keep boundaries clear and make operations easier to run and scale.


This is a practical overview of the questions physicians ask most often in New York, especially around responsibility, liability, and what actually changes day to day.

What an MSO Is In plain English

What an MSO Is In plain English

An MSO is a business entity that provides non-clinical services to a professional practice. Common MSO functions include staffing and payroll administration, benefits administration, revenue cycle workflow support, billing operations support, scheduling systems, call center operations, patient intake workflows, marketing operations, technology systems, analytics and reporting, vendor management, procurement, facilities support, and non-clinical compliance operations such as training systems and documentation workflows.

The medical practice entity remains responsible for the clinical side: patient care, medical judgment, supervision, credentialing, and clinical quality. A well run model makes those lines obvious, not blurry.


An MSO is a business entity that provides non-clinical services to a professional practice. Common MSO functions include staffing and payroll administration, benefits administration, revenue cycle workflow support, billing operations support, scheduling systems, call center operations, patient intake workflows, marketing operations, technology systems, analytics and reporting, vendor management, procurement, facilities support, and non-clinical compliance operations such as training systems and documentation workflows.

The medical practice entity remains responsible for the clinical side: patient care, medical judgment, supervision, credentialing, and clinical quality. A well run model makes those lines obvious, not blurry.

Successor Physician Arrangements and Why They Exist

Many transitions require a successor physician concept to ensure continuity of care, maintain payer participation, and support clinical leadership, especially when a founder is stepping back.

This role is often misunderstood as meaning one physician must personally carry every operational burden, but this is not the case.

A clearer way to think about it is this: the successor physician role supports clinical continuity and leadership while the MSO supports operations. This structure connects the two while keeping clinical independence intact.


Many transitions require a successor physician concept to ensure continuity of care, maintain payer participation, and support clinical leadership, especially when a founder is stepping back.

This role is often misunderstood as meaning one physician must personally carry every operational burden, but this is not the case.

A clearer way to think about it is this: the successor physician role supports clinical continuity and leadership while the MSO supports operations. This structure connects the two while keeping clinical independence intact.

The Most Common Concern: Does an MSO Structure Put My License at Risk?

The Most Common Concern: Does an MSO Structure Put My License at Risk?

This should be answered carefully and precisely.

1.

1.

1.

A lawsuit doesn’t automatically threaten a medical license. In New York, professional discipline is generally tied to professional misconduct and violations of professional standards. Being involved in a civil dispute, or being an owner of an entity involved in litigation, doesn’t by itself trigger license discipline.

2.

2.

2.

Civil liability and professional discipline are different tracks. A civil claim, including malpractice litigation, is different from professional discipline. Civil claims are about damages and legal liability. Discipline is about professional standards and regulator review.

3.

3.

3.

The practice can be sued is true, but that’s not the same as license loss. Entities get sued, Practices get sued and physicians can be named. However, that fact alone doesn’t equal license risk. What matters is the underlying conduct and whether professional standards were violated.

4.

4.

4.

A practical nuance without panic. Physician responsibility is usually tied to the patients a physician treats and the care a physician provides. There are also scenarios where exposure can extend beyond that narrow frame, such as supervision, coverage, documentation, ordering, or leadership roles with real oversight duties. That’s why governance clarity and clinical systems matter.


A practical nuance without panic. Physician responsibility is usually tied to the patients a physician treats and the care a physician provides. There are also scenarios where exposure can extend beyond that narrow frame, such as supervision, coverage, documentation, ordering, or leadership roles with real oversight duties. That’s why governance clarity and clinical systems matter.

Insurance: What it Covers and Why It Matters

Insurance: What it Covers and Why It Matters

When physicians worry about lawsuits, they usually mix two separate concerns.

One is clinical discipline which is a regulator and professional standards topic. The other is financial liability and that’s where insurance matters.

Most practices operate with a combination of coverages, and the details vary by carrier and contract, but the common building blocks in New York look like this:

1.

1.

1.

Professional liability or malpractice coverage. Practices and physicians typically carry malpractice coverage to defend claims and pay covered losses, subject to policy terms. This is the core protection for clinical claims, so if a physician is working through a practice, the practice’s policy may cover employed physicians and may also cover certain contracted physicians depending on structure, policy language, and how the physician is engaged.

2.

2.

2.

Entity coverage and who gets named. In many lawsuits, the plaintiff names multiple parties: the treating physician, the practice entity, and sometimes owners or managers. Being named doesn’t mean the claim is valid. It does mean you want the defense obligation and indemnity structure to be clear.

3.

3.

3.

Independent contractor physicians and coverage. If a physician provides services as an independent contractor (1099), it’s common for that physician to carry their own malpractice policy and for the services agreement to spell out insurance requirements clearly. A typical setup is the:

Contractor carries their own professional liability policy at specified limits.

Contractor carries their own professional liability policy at specified limits.

Contractor carries their own professional liability policy at specified limits.

Practice may require being listed as an additional insured where appropriate.

Practice may require being listed as an additional insured where appropriate.

Practice may require being listed as an additional insured where appropriate.

Contractor agreement includes indemnity language that matches the real world risk allocation.

Contractor agreement includes indemnity language that matches the real world risk allocation.

Contractor agreement includes indemnity language that matches the real world risk allocation.

Practice keeps its own entity level coverage.

Practice keeps its own entity level coverage.

Practice keeps its own entity level coverage.

4.

4.

4.

Tail coverage and transitions. When a physician leaves a practice or when employment status changes, tail coverage can matter depending on whether the policy is claims made or occurrence based. Tail is one of the few insurance topics that can surprise physicians if it isn’t discussed early.

5.

General liability and other nonclinical coverages. Separate from malpractice, practices usually carry general liability coverage for premises issues and related non-clinical risks. Many also carry cyber coverage and employment practices coverage depending on size and risk profile.

6.

What insurance does and does not do. Insurance is mainly about defense and financial protection. It doesn’t make clinical standards irrelevant or turn professional discipline into a non-issue. However, it does reduce the financial panic that often gets mixed into these conversations. Policies, limits, and who is covered can vary materially by carrier, policy type, and how physicians are engaged (employee versus independent contractor). Before signing, physicians should confirm coverage details directly with the practice’s insurance broker and New York healthcare counsel, and make sure the employment or services agreements match the insurance requirements in writing, including any additional insured language and tail coverage responsibilities where applicable.


What insurance does and does not do. Insurance is mainly about defense and financial protection. It doesn’t make clinical standards irrelevant or turn professional discipline into a non-issue. However, it does reduce the financial panic that often gets mixed into these conversations. Policies, limits, and who is covered can vary materially by carrier, policy type, and how physicians are engaged (employee versus independent contractor). Before signing, physicians should confirm coverage details directly with the practice’s insurance broker and New York healthcare counsel, and make sure the employment or services agreements match the insurance requirements in writing, including any additional insured language and tail coverage responsibilities where applicable.

Malpractice Reporting and What is Often Misunderstood

Malpractice Reporting and What is Often Misunderstood

A separate worry is the assumption that any claim permanently damages a physician record. Certain events, such as malpractice payments in specific circumstances, can be reportable to national systems depending on the facts and structure. Reporting systems and professional discipline are not the same thing and have different triggers. This is one reason mature platforms push for clean documentation, consistent workflows, and clear supervision and coverage policies.

What the MSO Should Never Do In a Compliant Model

What the MSO Should Never Do In a Compliant Model

In a compliant model, an MSO should NOT:

direct medical decisions.

direct medical decisions.

direct medical decisions.

direct medical decisions.

control clinical judgment.

control clinical judgment.

control clinical judgment.

control clinical judgment.

create compensation structures tied to referrals or clinical volume.

create compensation structures tied to referrals or clinical volume.

create compensation structures tied to referrals or clinical volume.

create compensation structures tied to referrals or clinical volume.

Good agreements make this boring and explicit.

Fair Market Value Fees What it Means in Practice

Fair Market Value Fees What it Means in Practice

Physicians are right to ask how MSO fees are set. In a compliant model, fees should be supportable as fair market value (FMV) and commercially reasonable for real non-clinical services actually delivered.


If the MSO provides more services over time, the agreement should allow fee adjustments tied to operational scope changes such as added locations, increased administrative complexity, additional technology modules, expanded nonclinical services, or increased staffing support. The adjustment logic should stay operational rather than clinical. Any adjustments should be documented in writing and supported by the expanded scope of non-clinical services actually being provided.

Physicians are right to ask how MSO fees are set. In a compliant model, fees should be supportable as fair market value (FMV) and commercially reasonable for real non-clinical services actually delivered.

If the MSO provides more services over time, the agreement should allow fee adjustments tied to operational scope changes such as added locations, increased administrative complexity, additional technology modules, expanded nonclinical services, or increased staffing support. The adjustment logic should stay operational rather than clinical. Any adjustments should be documented in writing and supported by the expanded scope of non-clinical services actually being provided.


Physicians are right to ask how MSO fees are set. In a compliant model, fees should be supportable as fair market value (FMV) and commercially reasonable for real non-clinical services actually delivered.


If the MSO provides more services over time, the agreement should allow fee adjustments tied to operational scope changes such as added locations, increased administrative complexity, additional technology modules, expanded nonclinical services, or increased staffing support. The adjustment logic should stay operational rather than clinical. Any adjustments should be documented in writing and supported by the expanded scope of non-clinical services actually being provided.

What to Expect Right Before Signing

What to Expect Right Before Signing

As final documents circulate, it is common for physicians to spend more time reviewing details and asking questions. This stage often brings a sharper focus on edge cases, responsibility allocation, and how specific provisions work in practice. Legal review can feel slower and more cumbersome at this point, not because the structure has changed, but because the transaction is moving from concept to execution. 


That shift naturally increases attention to wording, definitions, and how agreements interact with one another and it’s also normal for physicians to revisit topics that were previously discussed earlier in the process. This does not necessarily mean new risk has emerged. 


Operational improvements can also come into sharper focus at this stage. In a well-structured model, any upgrades (including facilities, technology, or equipment changes) should be staged, scoped, and documented, and should not create open-ended spending obligations for the physician practice.


In most cases, it reflects final diligence and a desire to confirm that roles, obligations, and protections are clearly documented. The most productive approach at this stage is to separate substantive legal or clinical issues from timing pressure and process noise. True risk questions belong with qualified New York healthcare counsel and should be addressed through the documents themselves. 


Process friction is typically resolved through clear sequencing, explanations, and allowing counsel to work through remaining technical points. Clarity at signing tends to reduce downstream friction. Well-structured transactions feel uneventful at close because expectations, responsibilities, and governance have already been made explicit in writing.


As final documents circulate, it is common for physicians to spend more time reviewing details and asking questions. This stage often brings a sharper focus on edge cases, responsibility allocation, and how specific provisions work in practice. Legal review can feel slower and more cumbersome at this point, not because the structure has changed, but because the transaction is moving from concept to execution.
 

That shift naturally increases attention to wording, definitions, and how agreements interact with one another and it’s also normal for physicians to revisit topics that were previously discussed earlier in the process. This does not necessarily mean new risk has emerged.


Operational improvements can also come into sharper focus at this stage. In a well-structured model, any upgrades (including facilities, technology, or equipment changes) should be staged, scoped, and documented, and should not create open-ended spending obligations for the physician practice. 

In most cases, it reflects final diligence and a desire to confirm that roles, obligations, and protections are clearly documented. The most productive approach at this stage is to separate substantive legal or clinical issues from timing pressure and process noise. True risk questions belong with qualified New York healthcare counsel and should be addressed through the documents themselves. 

Process friction is typically resolved through clear sequencing, explanations, and allowing counsel to work through remaining technical points. Clarity at signing tends to reduce downstream friction. Well-structured transactions feel uneventful at close because expectations, responsibilities, and governance have already been made explicit in writing.

As final documents circulate, it is common for physicians to spend more time reviewing details and asking questions. This stage often brings a sharper focus on edge cases, responsibility allocation, and how specific provisions work in practice. Legal review can feel slower and more cumbersome at this point, not because the structure has changed, but because the transaction is moving from concept to execution. 


That shift naturally increases attention to wording, definitions, and how agreements interact with one another and it’s also normal for physicians to revisit topics that were previously discussed earlier in the process. This does not necessarily mean new risk has emerged. 


Operational improvements can also come into sharper focus at this stage. In a well-structured model, any upgrades (including facilities, technology, or equipment changes) should be staged, scoped, and documented, and should not create open-ended spending obligations for the physician practice.


In most cases, it reflects final diligence and a desire to confirm that roles, obligations, and protections are clearly documented. The most productive approach at this stage is to separate substantive legal or clinical issues from timing pressure and process noise. True risk questions belong with qualified New York healthcare counsel and should be addressed through the documents themselves. 


Process friction is typically resolved through clear sequencing, explanations, and allowing counsel to work through remaining technical points. Clarity at signing tends to reduce downstream friction. Well-structured transactions feel uneventful at close because expectations, responsibilities, and governance have already been made explicit in writing.

Practical Checklist What Physicians Should Confirm Before Signing

Practical Checklist What Physicians Should Confirm Before Signing

A physician evaluating an MSO partnership should be able to answer:

  1. Who controls clinical decisions and where is it stated?

  2. What services does the MSO provide and how is scope defined?

  3. How are fees set and how can they adjust over time?

  4. What is the governance model and who decides what?

  5. What happens if there is conflict including dispute resolution and exits?

  6. What is the initial operating plan and how changes are approved?

  7. What compliance systems exist including training documentation audits and reporting workflows?

  8. What insurance is carried by the practice and by individual clinicians and what is required contractually?

  9. How tail coverage is handled in common transition scenarios?

Clarity helps more than reassurance.


A physician evaluating an MSO partnership should be able to answer:

  1. Who controls clinical decisions and where is it stated?

  2. What services does the MSO provide and how is scope defined?

  3. How are fees set and how can they adjust over time?

  4. What is the governance model and who decides what?

  5. What happens if there is conflict including dispute resolution and exits?

  6. What is the initial operating plan and how changes are approved?

  7. What compliance systems exist including training documentation audits and reporting workflows?

  8. What insurance is carried by the practice and by individual clinicians and what is required contractually?

  9. How tail coverage is handled in common transition scenarios?

Clarity helps more than reassurance.

A physician evaluating an MSO partnership should be able to answer:

  1. Who controls clinical decisions and where is it stated?

  2. What services does the MSO provide and how is scope defined?

  3. How are fees set and how can they adjust over time?

  4. What is the governance model and who decides what?

  5. What happens if there is conflict including dispute resolution and exits?

  6. What is the initial operating plan and how changes are approved?

  7. What compliance systems exist including training documentation audits and reporting workflows?

  8. What insurance is carried by the practice and by individual clinicians and what is required contractually?

  9. How tail coverage is handled in common transition scenarios?

Clarity helps more than reassurance.

Final Thoughts

Final Thoughts

In New York, the biggest problems in physician MSO transactions usually come from unclear roles, weak governance, poor documentation, misaligned expectations, or legal noise becoming the decision maker because the operating plan is vague.

When roles are clear, governance is polished, and operations are disciplined, the structure becomes predictable and workable.

Disclaimer: This article is for general educational purposes and is not legal advice. Every transaction is fact specific. Physicians should consult qualified New York healthcare counsel regarding CPOM, contracting, insurance, and professional responsibility questions.


Let’s Talk

We’re here to ensure your hard work is valued and your business thrives as part of Verdira.

Ready to secure your legacy?

Let’s Talk

We’re here to ensure your hard work is valued and your business thrives as part of Verdira.

Ready to secure your legacy?

Let’s Talk

We’re here to ensure your hard work is valued and your business thrives as part of Verdira.

Ready to secure your legacy?

Let’s Talk

We’re here to ensure your hard work is valued and your business thrives as part of Verdira.

Ready to secure your legacy?

info@verdira.com

307-381-3734

Sheridan, WY 82801

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info@verdira.com

307-381-3734

Sheridan, WY 82801

Home

Why Verdira

For Founders

Our Process

Own a Practice

Rogue

Team

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Blog

Contact

©2025 Verdira – All rights reserved

Privacy Policy

Terms of Service

Created by Perfika

info@verdira.com

307-381-3734

Sheridan, WY 82801

Home

Why Verdira

For Founders

Our Process

Rogue

Own a Practice

Team

Careers

Blog

Contact

©2025 Verdira – All rights reserved

Privacy Policy

Terms of Service

Created by Perfika

info@verdira.com

307-381-3734

Sheridan, WY 82801

Home

Why Verdira

For Founders

Our Process

Own a Practice

Team

Careers

Blog

Contact

©2025 Verdira – All rights reserved

Privacy Policy

Terms of Service

Created by Perfika

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Practice may require being listed as an additional insured where appropriate.