Considerations when Purchasing a Healthcare Business

Purchasing a health care business is a complicated process because the field is highly regulated. Not only does one have to be prepared to be a medical provider, but one must also be an efficient business owner. Here are the top ten considerations when purchasing a health care business:

1. Due Diligence. Due diligence encompasses all of the top considerations discussed in this blog which is why due diligence is first on the list! Before purchasing a health care business, understanding the who, what, where, when, why, and how, of the current state of that business will ensure you have all the information necessary to make sound decisions. Furthermore, due diligence allows you to identify potential liabilities, corrective actions, and applicable statutes, rules, and regulations.

Consider this before purchasing a business. Have you carefully inspected the business financial statements? Business finance is a key consideration when purchasing any business. Documents such as a financial statement gives a purchaser insight into the financial state of a business. A purchaser should review balance sheets, tax returns, profits and losses, financial audits, and other documentation regarding the business’s financial status prior to purchase.

To ensure you have conducted adequate due diligence into the business’s financial status, you should have an independent appraisal of the business conducted before making an offer. Adequate due diligence will ensure you do not pay more than the business is worth. Knowing the overall value of the business, its assets, and liabilities can help you avoid overpaying and help determine whether the business will be profitable. 

RELATED: Representing Investors in Health Care Facility Buy and Sell Transactions

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2. Staffing. Often the concern is understaffing; however, when purchasing a health care facility, overstaffing, and compensating the current employees are also major concerns. Before purchasing, the purchaser must confirm which employees will stay with the practice and if all employees have been paid. To avoid overstaffing or future claims by employees regarding pay, the purchaser must iron out these details before purchasing to promote a successful and efficient practice.

3. Administrative Complaints. The Agency for Health Care Administration (AHCA) is the agency that regulates licensure for health care facilities. Determining whether AHCA has any pending or past complaints against the facility is vital as AHCA has broad discretion in determining corrective action for misconduct. Disciplinary action could include but is not limited to revocation of licensure or fines. Our attorneys help navigate the administrative complaint process.

If there is a Pending Complaint, our firm can assist you with navigating this process.

RELATED: How to Survive and Stay in Business After Receiving a Complaint or Notice from AHCA

Seek Experienced Lawyers to Guide You Through the CHOW Process

We always recommend seeking the counsel of an experienced attorney/accountant to examine the financial statements of a business or facility that you are seeking to purchase. Our team of legal experts understands the unique financial details of a health care business. In fact, we often work side by side with our clients’ accountants to provide a comprehensive approach to purchasing a health care business or facility. Our team has assisted prospective business owners with this often tedious and complicated process. We are experienced in working directly with AHCA requirements, preparing the necessary documents, and meeting the timelines required. We will guide you throughout each step of this rigorous process and provide comprehensive advice along the way.