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Management Services Contracts

Houston Health Care Lawyers Serving Medical Providers Nationwide

The health care industry has seen a tremendous amount of change when it comes to the formation of business relationships that allow providers to prosper in a competitive and challenging environment. This includes arrangements involving physician practices that work with management service companies to delegate managerial and administrative responsibilities.

While management service arrangements offer providers many benefits, including streamlined efficiency and more time for physicians to focus on practicing medicine, they can also introduce unique issues when it comes to state and federal laws regarding health care fraud and abuse, including prohibitions against self-referrals and fee splitting.

Because violations of fraud and abuse laws can jeopardize the futures of medical professionals and practices – from creating exposure to costly and time-consuming audits to high stakes matters involving fraud investigations and civil or criminal penalties – ensuring regulatory compliance in any managerial service contract is of the utmost importance. At Hendershot, Cannon & Hisey, P.C., we know an “ounce of prevention is worth a pound of cure” when it comes to matters of health care and contractual / financial relationships forged by providers, and have the depth of experience to help medical clients throughout Texas and the U.S. when they need to draft, negotiate, and implement sound and compliant contacts.

Need to discuss a managerial service contract or another health or medical law issue? Call (713) 909-7323 to speak with our award-winning attorneys at Hendershot, Cannon & Hisey, P.C. during an initial consultation.

Medical Management Services Contracts & Regulatory Implications

Medical management service agreements can entail a range of administrative and managerial duties, including:

  • Management of a medical practice’s business functions (clerical, bookkeeping, accounting, billing, collections, secretarial, marketing, etc.)
  • Employment of non-medical personnel
  • Lease or sublease of a practice’s offices (for lease management and /or repair and janitorial services)
  • Purchase of medical and office supplies

In a regulatory landscape as stringent, dense, and confusing as health care, ensuring compliance is one of the most important facets of any successful medical practice. This is especially true when it comes to the contractual relationships providers form with others and their compensation arrangements for paying them. That’s because these relationships can create implications which may subject providers to increased scrutiny, oversight, investigation, and even liability in relation to waste, fraud, and abuse.

  • Anti-Kickback Statute – Certain types of management agreements between physician grounds and management service companies may violate the federal Anti-Kickback statute, which creates criminal liability for willfully and knowingly soliciting or receiving remuneration for referring services paid for by a federal or state health care program. In order to ensure any arrangement for medical management services are not subject to enforcement and penalties, providers need to ensure they fit within a “safe harbor,” or exception defined by law. Personal services or management services contracts, therefore, must meet all requirements of the relevant safe harbor in order for the exception to apply. This can include having written agreements that specify services to be provided, remain in effect for at least one year, sets compensation in advance based on fair market value, and not involve any services for promoting a business in violation of federal or state law, among other requirements.
  • Stark Law – The Stark Law, or self-referral law, prohibits referrals of designated health services to any entity with which a provider has a financial relationship. Because Stark Law violations can have substantial consequences for practitioners (including civil fines and provider exclusion), any agreements involving compensation arrangements (such as for management services) need to also fit within an exception defined by law, and providers must meet statutory definitions of a group practice.

Our firm assists clients in evaluating, drafting, negotiating, and implementing medical contracts involving management services and all other types of compensation arrangements and relationships so as to ensure regulatory compliance. Often, this requires a meticulous review of the circumstances, as well as ensuring arrangements meet all requirements of any applicable safe harbor or exception.

Comprehensive Counsel for Health Care Providers

Hendershot, Cannon & Hisey, P.C. has earned national recognition for our work in medical and health care law, and for providing the proactive counsel health care providers need when it comes to:

Our firm also leverages 130+ years of collective experience to provide responsive representation in time-sensitive matters when providers face audits, investigations, and potential penalties over alleged health care fraud. With our comprehensive approach to protecting the rights and futures of our clients, and our depth of experience and resources, we have become a law firm known for our ability to handle even the toughest and most challenging health care legal and regulatory issues.

To discuss your needs and our firm’s services, call (713) 909-7323 or contact us online today.

Committed To Protecting Your Interests

Lawyer Consulting a Client
  • "Our firm defended a health care client against a fraud and abuse investigation by the Office of Inspector General. The client's response: Trey, On behalf of myself and M., I would like to extend our gratitude and appreciation for an outstanding job in our presentations regarding the OIG matter. Your honest and thorough work and your belief in our honesty and integrity as physicians, which was conveyed to the OIG and resulted in giving us the opportunity to meet with them, was a smart move and is greatly appreciated. We truly appreciate all your hard work and representation. Ben, I would also like to take this opportunity to thank you for finalizing the documents for the purchase of . . . in such a short time."

    - A.
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