What Is an MSA (Management Services Agreement)?

If you own or want to open a med spa, you need to know what an MSA is and why it matters for your business. In short, an MSA (management services agreement) is what keeps your operations legal and compliant, especially in states with strict corporate practice of medicine (CPOM) rules.

Here's what you really need to know: an MSA is a contract between your med spa and a management services organization (MSO). It's a tool that lets non-physicians handle the business side while physicians keep full control over the medical side. If you get this piece wrong, you can face huge legal problems.

What’s an MSA? The Quick Answer

An MSA (management services agreement) is a contract between your physician-owned practice and an MSO. The MSO takes care of things like payroll, marketing, and other non-clinical tasks. The physician practice sticks to running everything on the clinical side.

The MSA puts all of this in writing, so there’s no confusion about who does what.

This separation keeps you on the right side of the law. CPOM laws in many states don’t let non-physicians control medical practices, so you can’t just own a med spa directly if you're not a doctor.

You need a structure that keeps business and medicine separate. That’s where the MSO/PC model and the MSA come in.

As we explain in our Medical Spa Business Classification guide, your MSA covers all the business nuts and bolts, but leaves all clinical decisions in the hands of doctors.

What’s in a Typical MSA?

Every MSA is different, but most answer the same questions. Here’s what you’ll usually find:

Roles and Responsibilities: The MSO usually owns things like real estate and equipment. It manages payroll and marketing and hires non-clinical staff. The physician practice oversees medical records and licensed providers and makes the clinical calls. There shouldn’t be any gray area here.
Financial Terms: The MSA spells out how the MSO gets paid. You’ll see options like a flat fee, a percentage of revenue, or a combo of both. All patient revenue must go into the physician company’s account first. The MSO can’t take money from patients directly.
Compliance: Your MSA should cover HIPAA. If your MSO handles billing or patient communications, you need a business associate agreement (BAA) too. Don’t skip this. The agreement should also lay out how to end the contract, who gets what equipment, and how you’ll solve disagreements.

If your MSA is vague about any of this, regulators will notice. They care about how you actually run things, not just what’s on paper. Make sure your contract is specific and matches your actual operations.

Use this table to identify the clause topics to discuss with your attorney when reviewing your med spa's MSA.

MSA clause overview
Clause	What it covers
Company and practice representations	Each party's authority to enter the agreement, business qualifications and the practice's statements about clinician licensing and insurance.
Management services	Which non-clinical tasks your management company handles, including staffing, facilities, supplies, bookkeeping and payment administration.
Compensation for services	A fixed, flat management fee described as consistent with fair market value, not a share of your practice's medical service fees.
Term and termination	How long your agreement lasts, how it renews, when either party can end it and which obligations continue afterward.
Practice responsibilities	Your practice's cooperation, records ownership and retained authority; clinical decisions stay with the physician practice.
Insurance	Which liability policies each party maintains, evidence of coverage and arrangements for claims reported after coverage ends.
Compliance with laws	How you and the other party address legal conflicts, revise the agreement or end it if changes cannot resolve them.
Independent contractor relationship	How your agreement defines the parties as separate businesses and describes the management company's independence in performing non-clinical services.
Marketing materials	Your practice's rights to use materials the management company creates, including limits during and after the agreement.
General provisions	How you handle notices, amendments, disputes and confidentiality, plus assignment terms, governing law and the attached business associate agreement.

This is a general overview, not legal advice; have a healthcare attorney in your state draft or review your MSA.

How an MSA Protects Your Med Spa

Understanding MSAs isn’t about paperwork. It’s about protecting your med spa from legal headaches.

If you set up your business the wrong way, you could lose your license, pay fines, or even get shut down. It also affects investors and how you can share ownership.

The MSO/PC structure with a solid MSA is the go-to for non-doctors in strict CPOM states.
You need separate bank accounts, clear processes, and regular compliance checks.
The MSO can never control clinical matters; the MSA keeps this clear.

As ByrdAdatto says, "Even if the MSA is crafted to align with compliance requirements, the actual operations of the business must follow what the document says." So it’s not just about the contract. Make sure you actually follow what you signed.

How Does an MSA Compare to Other Med Spa Contracts?

There’s more than one contract to think about when setting up your med spa. Here’s how an MSA stacks up:

Operating Agreement: This covers your LLC’s setup, like who owns what and how profits are shared. It’s about your legal entity, not your vendors.
Physician Services Agreement: This one explains the relationship between your clinic and your medical director. It covers supervision, clinical standards, and how the doctor gets paid.
MSA: This is all about your business operations. It outlines exactly what the MSO does for the med spa. Most med spas using the MSO/PC model need all three contracts to stay covered.

How to Negotiate Your MSA

Don’t just sign the first MSA you see. Here’s what to look for before signing:

Get specific about the scope of services. If it just says “management support,” that’s a red flag. List out every service the MSO provides.
Check the fee structure. It must be fair market value and can’t look like a profit-sharing arrangement.
Review how and when you or the MSO can end the agreement. Know what happens to equipment, patient records, or staff.

Work with a lawyer who understands healthcare, fee-splitting laws, and CPOM. Don’t use just any business attorney. For help finding the right fit, check out our guide on how to pick the right medical spa lawyer.

What should you review before signing an MSA?

Before you sign, have a healthcare attorney in your state review whether your MSA fits your ownership structure and daily operations. Bring your service list, fee proposal and questions about clinical authority.

Prepare questions for your attorney's review of the proposed agreement. Discuss renewal, termination, records access and responsibilities after the agreement ends. Check with your state board and attorney about your proposed arrangement.

Bottom Line: Build Your Med Spa on a Solid MSA

Knowing what an MSA is and what it needs to say gives you an edge. You’ll protect your license, your business, and your patients if you start with the right contract.

A strong MSA clearly splits up business and clinical operations. Regulators want to see these lines in black and white. Don’t treat your MSA as a “one and done” document. Make it part of how you run your business every day.

If you’re opening a med spa or doing a re-org, lay the right groundwork first. Read our step-by-step guide to opening a medical spa or our state-by-state ownership guide. Then, get legal and ops help before you start seeing patients or offering treatments. The right MSA sets you up for long-term success.

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Frequently Asked Questions

What is an MSA in healthcare?

An MSA, or Management Services Agreement, is a written contract between a physician-owned practice and a Management Services Organization (MSO). In medical spa and healthcare settings, the MSA defines how the MSO handles non-clinical operations - payroll, marketing, real estate, equipment, and non-medical staffing - while the physician practice retains full control over all clinical decisions. The contract is the legal backbone of the MSO/PC structure used to comply with Corporate Practice of Medicine (CPOM) laws.

What is the difference between an MSA and an MSO?

An MSO (Management Services Organization) is the legal business entity that provides non-clinical services; an MSA (Management Services Agreement) is the written contract between the MSO and a physician-owned practice. The MSO is the company; the MSA is the paperwork defining what that company does, how it is paid, and where clinical authority begins and ends. Every MSO/PC structure requires both - you cannot have one without the other.

What does an MSA include?

A typical MSA covers four categories. (1) Roles and responsibilities - who controls clinical decisions versus business operations, with no gray area. (2) Financial terms - flat fee, percentage of revenue, or hybrid, with all patient revenue flowing into the physician entity first. (3) Compliance provisions - HIPAA, plus a Business Associate Agreement (BAA) if the MSO handles billing or patient communication. (4) Termination and dispute terms - how the contract ends, who keeps what equipment, and how disagreements are resolved.

Why do medical spas need an MSA?

Medical spas need an MSA to stay compliant with state Corporate Practice of Medicine (CPOM) laws, which prohibit non-physicians from controlling medical practices. The MSA legally separates the business side (owned by non-physicians through an MSO) from the clinical side (owned by licensed physicians through a professional corporation). Without a properly written and operationally followed MSA, non-physician owners risk fines, license loss, or a forced shutdown. Regulators evaluate actual operations, not just contract language.

Can a non-physician own a medical spa through an MSA?

In CPOM states, a non-physician cannot directly own a medical spa but can own the MSO that supports one. The physician owns the clinical entity (professional corporation); the non-physician owns the MSO; the MSA contractually defines how they work together. Clinical entity ownership rules vary by state. See our state-by-state guide to who can own a med spa. Consult a healthcare attorney familiar with corporate practice of medicine rules before structuring ownership.

Medical review

reviewed this article for medical and regulatory accuracy. He is a board-certified dermatologist, Fellow of the American Academy of Dermatology, and co-founder and Chief Medical Officer at Portrait. His training includes Cleveland Clinic Lerner College of Medicine, research at the National Institutes of Health as a Howard Hughes Medical Institute research scholar, and dermatology residency at UT Southwestern.

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