Health systems, medical groups, and other healthcare entities frequently receive administrative and management services from management services organizations (MSOs) via a management services agreement (MSA).
These services often include revenue cycle management, regulatory compliance, human resources management, marketing, facilities management, and more. Relying on MSAs for support of certain nonmedical functions allows providers to focus on the clinical components of care while helping the organization gain efficiencies and cut costs.
Third-party management companies can be beneficial when an entity lacks specific expertise. For example, if a health system wants to open a freestanding ambulatory surgery center (ASC) but has never managed one, an ASC MSO might be able to operate it more efficiently. Or if the organization that needs the management services is smaller and doesn’t need full-time expertise, utilizing an MSO can be an efficient way to obtain a portion of someone’s time.
Provider organizations may also receive administrative and management support from an affiliated organization, such as a health system or corporate partner. In these cases, it is common for the affiliate partner to allocate some or all of the expense related to the support.
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