Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
If you are looking to sell my medical practice then make sure that you speak with an experienced lawyer who is going to be able to make sure that everything is handled correctly and ensure that this transaction is completed without any issues. There is a big difference between selling a business and selling a medical company. Even if it’s small, you need to make sure that you follow every rule and regulation in regards to:
Transfer of patient data: Remember, the information you have for your patients is sensitive. This includes medical history, address, phone number, family information, social security number, date of birth and more. You need to know how to legally and appropriately transfer responsibility of that data.
Transfer of licenses and agreements: Every license you applied for, every contract and agreement you have made over the past several years now needs to be looked at to ensure that it is not only up-to-date, but whether it can be transferred or if the new owner of the business has to apply for their very own. We will help you go through each one and ease the transition of these licenses.
Taxes and liability: The circumstances of the deal, your personal investment and other factors will determine what you pay in taxes and what liabilities you have to be aware of. Our team will go over each part of the transaction to make sure that you get the information you need to make this transaction run as smoothly as possible.
Prior to trying to sell my medical practice, we will work with you and your team to make sure that everything is properly handled. Before you get started make sure to contact us for more information and to speak with an attorney who has experience handling these matters.
Thinking About Selling Your Practice? Preparation is key and the difference between a successful sale and seller’s regret.
Step 1: Call Your Financial Planner
Be sure that you can afford to leave the business
Most buyers will require a comprehensive non-compete and you should be certain that you are financially prepared to retire, sell, or move before signing any restrictions.
You will also want to ensure that you are planning for the income you are about to receive. Are there vehicles in place or options that are best to ensure the purchase price is put to its best use for you.
Consider post sale options if not retirement – are you going to be employed by the buyer? Are you selling to an associate and will phase out? Are you just moving and will need to find new employment/open a practice?
Step 2: Visit Your Accountant
Your business is only worth as much as can be defined on paper.
If a potential buyer cannot make sense of your accounts and assets, you may leave significant value on the table.
Get your financial history in order by reviewing tax returns, profit statements, AR reports, and payroll history for prior 3-4 years.
Clean up creative bookkeeping – you will have to promise the buyer that your financial statements are true and accurate.
Have your accountant help value assets of your business – or use an appraiser if necessary.
Discuss company structure – there may be restructuring needs or you may need to transition to a different structure for tax purposes.
Those in the practice of dentistry today have many options when it comes to building a practice. Should you work for an employer? Build your own? What about buy a practice? More and more, we see young dentists wishing to avoid private equity and buying out a retiring dentist’s practice. The amount of regulation imposed upon those entering into the dental practice arena can be staggering. Further, buying a dental practice requires many considerations that are unique to other areas of business. Understanding the purchase process will help protect your investment and could keep you from experiencing any unnecessary liability.
First, organize a team of specialized dental experts, such as a dental CPA, Professional Practice Lender, dental law attorney, and a practice consultant. Having a team of professionals guide you through all aspects of the deal will keep you on track, avoid potential issues, accomplish specific task items, and properly comply with any legal considerations. read more
Many physician groups and health care companies will enter the market at some point to sell their business. In the rare case, the selling group will already have a buyer who is ready and willing to pay and close on the business sale. More often than not however, most sellers will utilize the services of a business broker to help find a suitable buyer, and will compensate the broker on a commission basis upon closing. Unlike real estate closings, whereby the main concern is the title of the property being conveyed, medical practice sales require much more detailed representation on all aspects of the business, including but not limited to, real property, existing contracts, existing patients, and medical equipment.
Before signing a business broker listing agreement, ensure that the following points are considered to avoid potential pitfalls: read more
Thinking about selling a medical practice? Here are some steps for preparing your business in advance of a transaction.
Visit your financial planner.
Be sure that you can afford to leave the business, if you are retiring. Most times, buyers will require a comprehensive non-compete and you should be absolutely certain that you are financially prepared to retire or sell before you sign that restrictive covenant.
Visit your accountant.
Get your financial history in order. Review and re-review your tax returns and profit statements for the past three years to ensure that the business is appropriately reflected in those records. Take the time to clean up any “creative” bookkeeping so that the buyer is given a complete and accurate picture of the business they are buying into. You are likely going to have to make a representation that your financial disclosures are true, so take the time to get comfortable with that representation early on. read more
Private money (e.g. private equity) is in full swing purchasing medical practices with large profit margins (e.g. dermatology). This is NOT the same thing as when physician practice management companies (PPMCs) bought practices the 90s. Back then, the stimulus for the seller was (a) uncertainty re practice profits in the future, and (b) the stock price. Selling practices got some or all of the purchase price in stock, with the hopes the purchasing company stock would far exceed the multiplier applied to practice “earnings” (the “multiple”). Buyers promised to stabilize and even enhance revenues with better management and better payer contracting. If the optimism of the acquiring company and selling doctors was on target, everyone won because the large stock price made money for both the buyer and seller. The private equity “play” today is a little different.
Today’s sellers are approaching the private equity opportunity the same way they did with PPMCs, except for the stock focus since most private equity purchases don’t involve selling doctors obtaining stock. Sellers hope their current practice earnings will equate to a large “purchase price.” And they hope the buyer have better front and back office management that will result in more stable and even enhanced earnings. And for this, the private equity buyer takes a “management fee,” which they typically promise (though not in writing) to offset with enhanced practice earnings. read more
Private money (e.g. private equity) is back chasing those selling medical practices and medical business acquisitions. This time around it is very different from similar activity in the 90s. Back then, the movement was public companies aggregating gross income dollars, which for a time drove stock prices. Today’s private money buyers are looking to maximize profitability through achieving efficiency and aggregating large groups for leverage and the development of new income streams. Though stock (in the form of warrants and options or stock itself) if often on the table, it doesn’t have to be. Buyers are doing all cash deals, albeit to some degree on an earnings basis. If you want the full price, you have to remain involved and do what you can to maintain revenues and perhaps even drive them up.
Physicians especially have to know what they’re dealing with and then have at least a basic understanding of the issues that will drive these deals. To begin with, “private equity” simply means private investors (typically a group that pools their capital) that buy a portion or all of a company. Their investments are usually much larger than venture capital firm deals. They are not publicly traded entities. What do they want? To invest money in mature businesses, grow a company’s profitability and then “flip” their ownership to another buyer, typically in three to five years form their launch date. In contrast, venture capital firms usually invest in start-ups, buy 100% of the company and require control. read more
The Department of Health and Human Services announced this morning that it has entered into a settlement agreement with Parkview Health System, Inc., an Indiana medical group caught up in HIPAA violation case. Parkview was assisting a retiring physician to transition her patients to new providers. Parkview was also considering purchasing some of the physician’s patient records. When Parkview attempted to return between 5,000 and 8,000 patient records to the physician, she was not home to accept their return. Parkview employees left cardboard boxes containing between 5,000 and 8,000 patient medical records outside of the physician’s home, and within twenty feet of a public road. In settlement and release of HHS’ claims against Parkview for such a HIPAA violation, Parkview agreed to pay the Department of Health and Human Services $800,000 and enter into a Corrective Action Plan. The entire Resolution Agreement between Parkview and HHS is available here.