Buying or selling a medical practice can be an effective strategy that moves you closer to your personal and professional goals. However, it is essential that you consult with a business lawyer before moving forward with such a significant transaction.
Patrick, Harper, & Dixon is a business law firm that has been serving clients in Hickory, North Carolina, since 1946. Our experienced business attorneys are well-versed in the special considerations that accompany the decision to buy or sell a medical practice. Call our firm today to learn more about how we can help.
Legal and Financial Concerns With Medical Practice Transactions
Coming to the decision to buy or sell a medical practice is a multi-step process. If you are thinking about buying or selling an existing practice, there are many factors that you must consider.
Purchasing a Medical Practice
If you are planning to purchase a medical practice, you may need to consider the available options to narrow down which is the best choice for you. If you already have a specific practice in mind, your business attorney will need to get started on the process of performing due diligence.
During this investigative period, your lawyer will look into many different areas of the practice to help you determine whether or not the purchase is a good investment. Such areas include:
- Financial records, income, and expenses
- Record-keeping processes for patient data
- Billing and coding practices
- Tax obligations
- Legal issues or lawsuits
- Regulatory compliance requirements
- Leasing agreements and existing contracts
- Equipment and technology
- Data security and privacy
- Patient demographics and potential for growth
It may sound obvious, but all of these facets are a lot to consider. Nevertheless, failing to perform adequate research in even one of these categories puts you at risk of legal and financial liability.
Selling a Medical Practice
If you are currently the owner of a medical practice that you are preparing to sell, there are many considerations you should take into account, including the following:
- Existing leases and contracts
- Tax obligations
- Long-term goals
- Transitioning existing employees and patients
- Valuing your practice
With regard to those last two points, you are probably aware that you do not simply walk away from an established medical practice. You have to consider what will happen to your existing staff and patients. You likely have existing contracts in place, like leasing agreements, that you may need to end prematurely. You may also need to consider whether to include equipment and supplies in the sale of your practice.
Working with an experienced business attorney helps ensure that none of these areas are overlooked. Your attorney will assist you with the process of valuing your practice and will help you sell it for a fair price.
Unique Legal Considerations for Medical Practices
Any time there is a change in the ownership of a business, the process requires an extensive investigation into the business’s background, finances, and general operations.
When the business in question is a medical practice, due diligence is particularly relevant, as medical practices are subject to a unique body of rules and regulations. When buying or selling a medical practice you have to ensure compliance with federal, state, and local laws, including HIPAA, Stark Law, and the Anti-Kickback Statute.
During this process it is important to have a clear understanding of your tax obligations, including how to minimize tax liabilities and how to address areas like the depreciation of acquired assets.
When a business transaction involves transferring ownership of a medical practice, it is best to consult an experienced business law attorney who has ample experience navigating the unique legal and financial concerns that can impact a medical practice.
Ultimately, failing to consider regulatory and compliance concerns can be a mistake that leads to high costs, a damaged reputation, and even criminal charges.
Why You Should Consult a Business Lawyer
Whether you are buying or selling a medical practice, working with an experienced business attorney is essential. On either end of the impending transaction, there is a great deal of research and investigation that goes into ensuring the change in ownership is a wise business decision.
As you move through the stages of buying or selling a medical practice, your business attorney will do the following:
- Consult with you about your goals
- Help identify potential buyers/practices
- Complete research and other due diligence
- Draft a purchase agreement
- Negotiate the terms of the transaction
- Assist in any legal or financial requirements
Failing to consider the many legal and financial implications that accompany the sale or purchase of a medical practice can be devastating. With the right representation, you will rest easy knowing that any potential liabilities have been identified and handled appropriately.
Consult a Business Law Attorney in Hickory, North Carolina
Patrick, Harper, & Dixon is a business law firm located in Hickory, North Carolina. For nearly 80 years, our attorneys have helped protect the interests of our clients. If you are considering buying or selling a medical practice in or around Hickory, our legal team has the skill and understanding to help ensure the transaction is beneficial. Contact us today to schedule a consultation.
