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What Is a Management Services Organization?

By Eugene P.
Updated Mar 03, 2024
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A management services organization (MSO) is a business that provides non-medical and administrative services to physicians, hospitals or other healthcare practices. The organization could comprise a group of physicians, independent investors or even a hospital. Physicians can benefit from using an MSO because it frees them from having to perform basic administrative tasks. The management services organization benefits by making a profit from its members and through other channels. The doctors within the organization might all be in a single building or could include many doctors across an entire region.

There are many aspects to a physician's practice that must usually be handled either by the doctor or by a staff, which the doctor ultimately must manage. The goal of a management services organization is to take on the burden of one or more of the administrative tasks that the doctors they serve would otherwise perform. The MSO might be very specialized in a certain field, or it could be a larger organization that provides management of every aspect needed to run a medical practice.

Specialized examples of a management services organization could be a business that exclusively performs medical records coding or one that only manages electronic health records (EHR). Alternately, some organizations are all-in-one providers capable of managing nearly every administrative aspect of a practice. These larger organizations can often employ smaller MSOs to provide all of the necessary services.

A management services organization sometimes branches out as the result of an independent practice association (IPA). An IPA is simply a group of physicians who come together to be able to act as a single legal entity when billing. MSOs that arise from IPAs often do not focus primarily on the management services that larger companies would.

Using a management services organization can help physicians to save money within their practices. This can be done because the MSO is providing services for many physicians and, thus, will be able to achieve better rates on medical software, equipment and other services. An organization also may be able to reduce the cost of insurance and medications, passing the savings on to the physicians.

One major service an MSO can provide is expertise. Doctors who do not have time to keep abreast of the changing regulations for EHRs or coding and billing practices can safely rely on an MSO to remain current. This can lead to a reduction in administrative errors and an overall increase in efficiency. It also frees up the doctors to see more patients.

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