MSO-PC separates clinical and business ownership under CPOM rules — and most banks fumble it. Here's the structure explained and what to look for in a bank.
MSO-PC isn't exotic. It's just multi-entity banking that most banks fumble. Here's the structure in plain English.
Your group has one CEO, one brand, one dashboard. And seven bank accounts, because your CPA insists they stay separate.
Welcome to MSO-PC. It's the structure that lets non-clinicians fund healthcare without breaking the law. It's also the structure that breaks most banks.
A licensed clinician owns the Professional Corporation, or PC. The Management Services Organization, or MSO, handles everything that isn't clinical: HR, billing, IT, real estate, marketing. The two are tied together by a Management Services Agreement (MSA).
That's it. That's the whole model, at least until you get to the complete guide to MSO-PC banking (opens in a new tab) for how it plays out at the bank.
Most US states have a Corporate Practice of Medicine doctrine, often called CPOM. It says clinical decisions belong to clinicians, not investors, a line that extends to what CPOM says about bank account ownership (opens in a new tab). So if you want outside capital in healthcare, you can't put it directly on the practice's cap table. Not PE. Not family offices. Not even a parent company across state lines.
The MSO-PC split solves that. The PC stays clinician-owned. The MSO is investor-owned. The MSA moves cash and services between them at fair market value.
It looks like a tax dodge. It isn't. State medical boards and PE diligence teams have blessed the model for decades when it's papered correctly.
Picture a 5-state dental DSO, following how a multi-state DSO banking architecture is actually built (opens in a new tab). The MSO is a Delaware C-Corp, owned by a private equity sponsor. Each state has its own PC, owned by a licensed dentist who lives there.
The PCs collect from patients and payers. The MSO bills each PC a monthly management fee. The dentist owners take distributions from the PC. The sponsor takes distributions from the MSO. Everyone's lawyer sleeps at night.
Patient and payer dollars hit the PC first. That's a hard rule. The PC then pays the MSO a management fee. Common patterns:
Done right, it's clean and audit-ready. Done wrong, it looks like fee-splitting. That's illegal in most states.
Generalist banks treat each entity like a separate customer. Sounds fine. Until you operate it. Real friction looks like this:
Add it up and a five-PC group burns 4-6 weeks of CFO time on banking ops every quarter. Not glamorous. Not optional either.
If your bank can't answer all five with a straight face, you're paying them to do their job:
For Lemma, those answers are yes, yes, yes, yes, and $10M per entity through the IntraFi Cash Service sweep network.
The MSO-PC structure isn't the problem. The bank is. Pick banking that ships entities like a software product (opens in a new tab). That's the fix.