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This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.

Take a typical situation: a Florida physician who has built a successful practice over twenty years wants to sell to a well-capitalized buyer — a private-equity platform, a regional group, an investor who is not a licensed physician. The economics look like any other business sale: a multiple of earnings, a rollover stake, an employment agreement for the selling doctor. Then the buyer’s healthcare counsel explains that the non-physician buyer cannot simply purchase the practice and bank its professional fees the way it would buy a landscaping company. The deal has to be built around two Florida statutes that most business buyers have never heard of, and the structure that results — the management services organization — is the reason healthcare M&A looks different from everything else.

The two statutes that shape the deal

Florida does not have a single clean statute that says “only doctors may own medical practices.” What it has instead is a pair of prohibitions that, taken together, make a naked acquisition of a physician practice’s professional revenue by a non-physician legally hazardous. The first is the fee-splitting prohibition. Section 458.331 of the Florida Statutes makes it a ground for discipline for a physician to pay or receive any commission, bonus, kickback, or rebate, or to engage in any split-fee arrangement in any form whatsoever, with an organization or person, directly or indirectly, for patients referred to providers of health care goods and services. The statute reaches arrangements that divide a physician’s professional fee with a non-physician, which is exactly what a buyer collecting the practice’s professional revenue can look like if the structure is careless.

The second is the patient-brokering statute. prohibits patient brokering — broadly, paying or receiving a benefit in exchange for patient referrals — and, unlike the disciplinary fee-splitting rule, it carries criminal penalties. It contains exceptions, but they are specific and they are not a general license for whatever a deal wants to do. The two statutes operate on different registers, one professional-disciplinary and one criminal, but they point the same direction: money flowing between a physician’s practice and a non-physician owner has to be structured so that it is payment for legitimate services or property, not a split of professional fees or a payment for referrals.

Why the deal runs through an MSO

The structure that healthcare lawyers reach for is the management services organization, or MSO, and it exists precisely to thread these statutes. The professional practice — the entity that actually delivers medical care and bills for professional services — stays owned by a licensed Florida physician. The non-physician buyer owns a separate company, the MSO, which does not practice medicine and does not own the practice. Instead, the MSO contracts with the practice to provide the non-clinical infrastructure: real estate, equipment, staffing, billing and collections, scheduling, marketing, IT, compliance, and management. The practice pays the MSO a management fee for those services. The buyer’s return comes through the MSO’s fee, not through ownership of professional revenue.

Done correctly, the MSO model lets investor capital participate in the economics of a medical practice without the non-physician owning the practice or splitting its professional fees. The clinical entity remains physician-owned and physician-controlled on matters of medical judgment; the business entity captures the value of the operating infrastructure it genuinely provides. This is the same conceptual move that shows up across Florida healthcare M&A — the careful separation of the licensed, regulated operating entity from the capital behind it — and it echoes the change-of-ownership and licensing discipline that governs deals for a Florida home health agency or a Florida pharmacy, where the license cannot simply be sold to whoever has the money.

Where the structure gets tested

An MSO is not a magic word. It is a set of facts, and regulators and courts look at the facts, not the label. The pressure point in every one of these deals is the management fee. If the fee is set as a straight percentage of the practice’s professional collections, it starts to look like the very fee-split the statute prohibits — the non-physician is taking a cut of professional revenue. The more defensible approaches tie the fee to the fair market value of the services the MSO actually provides, whether as a flat fee, a cost-plus arrangement, or another structure supportable as fair market value rather than as a share of professional fees. The fee has to be justifiable as payment for real services at a real value, set in advance and not varying with the volume or value of referrals.

The second pressure point is control. The arrangement has to leave genuine clinical authority with the licensed practice. If the MSO’s contracts, in form or in practice, hand the non-physician owner control over clinical decisions, hiring and firing of physicians on clinical grounds, or the medical judgment of the practice, the separation that justifies the whole structure starts to dissolve. The documents — the management services agreement, the practice’s governance, any equity arrangements with the selling physician, restrictive covenants, and the flow of funds — all have to tell a consistent story: a non-physician providing and being paid fair value for non-clinical services, and a physician retaining ownership and clinical control of the practice.

The third is the referral and marketing piece, where section 817.505’s criminal exposure makes precision essential. Marketing and patient-acquisition arrangements that look like payment for referrals are exactly what the patient-brokering statute targets, and the criminal character of that statute means the cost of getting it wrong is not measured only in deal value. Any arrangement touching how patients come to the practice needs to be tested against the statute’s specific exceptions rather than assumed to fit.

What each side should take from this

For a non-physician buyer, the lesson is that the purchase agreement is only half the deal. The other half is the MSO architecture, and a buyer that prices the transaction as though it is acquiring professional revenue directly is pricing a structure that does not exist. The diligence has to confirm that the target’s existing arrangements already comply — that the practice is not carrying legacy fee-split or referral problems the buyer would inherit — and the deal documents have to build a management-fee and control structure that survives scrutiny under both statutes.

For a selling physician, the structure determines what is actually being sold and what the doctor keeps. The physician typically continues to own the professional entity, signs a long-term management agreement and employment arrangement, and takes a meaningful part of the consideration through the MSO side. Understanding which entity holds what, how the management fee is set, and what clinical authority the physician retains is the difference between a clean exit and an arrangement a regulator could later unwind.

The takeaway

A non-physician cannot buy a Florida medical practice the way it would buy an ordinary business, because section 458.331’s fee-splitting prohibition and section 817.505’s criminal patient-brokering statute stand in the way of simply acquiring and pocketing professional revenue. The market’s answer is the MSO: physician-owned clinical entity, investor-owned management company, and a fair-market-value management fee that pays for real services rather than splitting fees or buying referrals. The structure works when the facts support it — a defensible fee, genuine clinical control left with the physician, and referral arrangements that fit the statute’s exceptions — and it fails when the label is doing work the facts cannot. In Florida healthcare M&A, the structure is the deal.

Our Fernandina Beach office works with physicians and investors on Florida healthcare transactions and on the MSO, management-fee, and compliance structure that a medical-practice acquisition in Florida requires.

If you are buying or selling a Florida medical practice and want the fee-splitting and patient-brokering structure pressure-tested before you sign, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.