CONTENTS
- 1. The Client Who Sought Help with a Medical Management Contract
- - What Is an MSO?
- 2. Medical Management Contract: Defending Against an Unjust Termination Notice and Claim for Damages
- - Rebutting the Claim of Unpaid Fees
- - Rebutting the Claim of Unauthorized Domain Use
- - Rebutting the Claim of Failure to Provide Accounting Records
- 3. Result of Responding to the Medical Management Contract Dispute: Successful Amicable Termination of the Contract
1. The Client Who Sought Help with a Medical Management Contract
This is the account of a client who requested assistance in connection with a medical management contract.
The client, who operates a medical institution, concluded a contract with a medical management specialist company (hereinafter MSO) in order to reduce the burden of non-medical work and for efficient management.
The company provided services such as website production and operation, accounting support, marketing on behalf of the institution, and support for some billing work, and under the contract had received a certain percentage of the hospital's revenue as a fee.
In the course of performing the contract, however, differences of opinion grew over matters such as the timing of payment of the fee, the right to operate the website domain, and the scope of access to accounting materials, and ultimately the two sides reached the point of exchanging certified mail.
The client therefore requested assistance from Daeryun LLC, where an attorney well versed in the Medical Service Act and the Personal Information Protection Act, an attorney with extensive experience in providing legal advisory services to medical institutions, and an attorney with experience at the Korea Medical Dispute Mediation and Arbitration Agency work together.
What Is an MSO?
A Management Service Organization (MSO) is a company that, when a medical professional establishes and operates a hospital, performs on the hospital's behalf the various management tasks other than medical care.
It is a structure in which the doctor and medical staff focus on patient care, while the MSO handles the non-medical aspects of the hospital, such as human resources, labor affairs, accounting, marketing, and facility management.
Recently, a growing number of medical institutions are adopting an MSO for efficient hospital operation and for tax and tax-saving purposes.
An MSO provides nearly all of a hospital's management support services other than medical practice. Representative examples are as follows.
-Human resources and labor management
Employee recruitment, management of employment contracts, attendance management, and the like
-Tax and accounting work
Hospital accounting, tax filing, financial analysis
-Marketing and promotion
Advertising planning, production of promotional materials, operation of online marketing
-Facility management
Management of hospital buildings, equipment, and lease contracts
-Medical device and supplies management
Purchase and lease of equipment, procurement of supplies on behalf of the hospital
2. Medical Management Contract: Defending Against an Unjust Termination Notice and Claim for Damages
In connection with the medical management contract, the client received a notice of contract termination from the MSO firm on the following grounds and was faced with a claim for damages of 100 million won.
Daeryun LLC constructed a defense rationale on the basis of the evidence and legal principles that could rebut the MSO firm’s assertions.
▶The client did not pay the service fee under the contract within the deadline
▶The client used an independent domain without consent
▶The client did not provide access information for the accounting ledger and tax-related systems
Rebutting the Claim of Unpaid Fees
Even though the client had requested billing for the fee first, the firm delayed sending the invoice, and upon receiving the invoice the client paid immediately.
This was not an intentional default but a result of the delay by the MSO firm in sending the invoice.
To prove that no fault lay with the client, the attorney in charge submitted as evidence the relevant text messages, the record of deposits and withdrawals, and the like.
Rebutting the Claim of Unauthorized Domain Use
The MSO firm claims that the client's hospital used the domain without authorization and asserts termination of the contract and damages for breach of contractual obligations.
The attorney in charge emphasized that the use of the domain in question resulted from the MSO firm's recommendation that the hospital operate it independently, citing a shortage of technical personnel and delays in production.
At the MSO firm's request, the client produced and operated the website at its own expense.
The attorney in charge submitted as evidence the text messages and email exchanges between the client and the MSO firm.
Rebutting the Claim of Failure to Provide Accounting Records
Under the contract, inspection of accounting materials is permitted only ‘within the scope of tax-processing purposes.’
A demand for unlimited inspection or for the provision of an ID and password exceeds the scope of the contract, and this raises concerns about violations of the Medical Service Act and the Personal Information Protection Act.
The attorney in charge emphasized the above points and also emphasized that, because the client had already terminated the engagement due to quality issues with the services of the tax firm connected by that company, the purpose of providing the accounting materials no longer existed.
3. Result of Responding to the Medical Management Contract Dispute: Successful Amicable Termination of the Contract
As a result of the response to the medical management contract dispute, the company did not continue with any further assertion of termination or claim for damages, and the client was able to terminate the contract without unfavorable conditions.
Thereafter, the client established an independent accounting and promotion system and came to operate the hospital stably.
A medical management contract is directly connected to the hospital’s legal stability and management initiative.
Daeryun Law Firm provides legal assistance throughout the entire process, including review of the contract, revision of clauses, prevention of potential Medical Service Act violations, response to certified content mail, and formulation of grounds for refusing unreasonable demands.
Please request a consultation at any time from Daeryun Law Firm, which brings together attorneys well-versed in medical law and contract review, attorneys qualified as pharmacists or oriental medicine doctors, and attorneys with extensive experience in providing legal advisory services to medical institutions.
This content is based on actual case studies of Daeryun Law LLC with some adaptations, and the copyright belongs to our firm.
Unauthorized reproduction, duplication, or distribution and other copyright infringements may result in legal action under applicable laws.
