Digital Health Services

The MSO-PC (Management Services Organization/Professional Corporation) or Friendly PC model is essential for health tech companies looking to scale telehealth and virtual care services while adhering to Corporate Practice of Medicine (CPOM) laws. This structure enables MSOs to efficiently handle administrative and business operations while maintaining control over clinical decision-making. However, navigating the maze of federal and state regulations requires expert guidance, especially when expanding across state lines where CPOM rules vary significantly. Our digital health advisory team can help guide you every step of the way. We work with top-rated hospitals, health systems, and physician groups with our healthcare industry experts, so we understand what providers need to see before they’ll partner with you.

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The management fee structure in digital health companies using MSO-PC models can have significant accounting and tax implications that, if not handled properly, can trigger IRS scrutiny or state regulatory issues. Properly accounting for these fees is crucial to ensure accurate financial reporting, compliance with fair market value requirements, and optimal tax treatment. These fees are treated as operating expenses affecting the company’s profitability and tax liability; however, tax regulations require careful consideration of whether these fees are deductible and properly substantiated. Our experts help you design compliant fee structures, ensure proper documentation and accounting treatment, and navigate the complexities of management services agreements to support both your business growth and regulatory compliance needs.

As MSO-PC structured digital health companies become profitable, filing a consolidated income tax return can materially improve tax efficiency, but only if the appropriate provisions are in place in the business’ agreements. Under CPOM rules, the PC must be legally owned by a licensed clinician. However, the IRS has increasingly focused on beneficial ownership, not just legal title, when evaluating whether an MSO and its affiliated PCs qualify as a controlled group. We perform a beneficial ownership analysis that evaluates whether the MSO is the beneficial owner of the PC through detailed review of the Management Services Agreement (MSA) and shareholder agreements.

Consolidation planning ties directly into Qualified Small Business Stock (QSBS) strategy. Proper planning is required to confirm potential QSBS eligibility and preserve it. Decisions around structure, intercompany economics, and consolidation can impact whether the MSO can qualify as a §1202 corporation, affecting potential future exit tax savings.

How the OBBBA Impacts Digital Health Companies: Key Tax Changes You Should Know – Withum 

R&D tax credits offer digital health companies a valuable financial incentive to invest in research and development efforts, yet many companies leave significant money on the table by not pursuing these credits early in the business life cycle. These tax credits can substantially reduce the overall cost of innovation, whether you’re developing new AI algorithms, building telehealth infrastructure, or creating patient monitoring technology. For early-stage companies, R&D credits can even be applied against payroll taxes, providing immediate monetization. Our specialists help you identify qualifying activities, properly document your R&D efforts, and maximize your credit capture so you can allocate more resources toward developing cutting-edge healthcare solutions and staying competitive in a rapidly evolving industry.

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Digital health companies at the growth stage often find themselves caught between needing sophisticated financial leadership and not being ready to hire a full-time CFO. Whether you’re preparing for Series A fundraising, managing rapid ARR growth, or building financial infrastructure for enterprise sales, having experienced financial guidance is critical. Our CFO advisory services provide strategic financial leadership tailored to digital health companies, including business model refinement, financial projections that resonate with healthcare-focused investors, custom KPI dashboards, and preparation for institutional investment. We help you build the financial foundation needed to scale confidently while avoiding costly missteps that can derail fundraising or growth plans.

Explore OASys

For digital health platforms, HIPAA and SOC 2 compliance aren’t optional—they’re fundamental to building patient trust, winning enterprise contracts, and avoiding regulatory penalties. Healthcare organizations and benefit consultants evaluating digital health platforms increasingly require SOC 2 attestation before considering a platform, while HIPAA compliance remains the baseline for handling protected health information (PHI). Our compliance specialists help you implement security measures, establish privacy policies, and achieve SOC 2 compliance that gives you credibility with enterprise clients and healthcare organizations.

Learn More About Our SOC 2 Compliance Services