What Is an MSO in Healthcare?

How the MSO-PC Structure Works

The MSO-PC structure separates business operations from clinical operations into two distinct entities:

• The MSO — owned by operators, investors, or entrepreneurs. Handles billing, staffing, marketing, technology, real estate, and all non-clinical functions. Earns revenue via a Management Services Agreement (MSA) with the PC.
• The PC — owned by a licensed physician (the friendly PC owner). Employs clinical staff, holds the medical license, and delivers patient care. The PC pays the MSO a management fee.

This structure allows non-physicians to own and operate profitable healthcare businesses while remaining fully compliant with the Corporate Practice of Medicine (CPOM) doctrine.

Who Needs an MSO?

Any non-physician entrepreneur or investor who wants to operate a healthcare business in a CPOM state. This includes:

• MedSpa and aesthetics operators
• Telehealth platform companies
• GLP-1 and weight loss clinic operators
• PE-backed healthcare companies
• Healthcare franchise operators
• Digital health startups delivering clinical services

The Role of the Friendly PC Owner

The PC must be owned by a licensed physician. Most operators don't have a physician co-founder — which is where a friendly PC owner comes in. A friendly PC owner is a licensed physician who holds the PC shares, satisfying the CPOM ownership requirement, without taking an active role in daily operations.

Which States Require the MSO-PC Structure?

CPOM enforcement varies. The strictest states — California, Texas, New York, Florida, and New Jersey — all require a physician-owned PC for any entity delivering medical services. See the full state CPOM guide.