Great question. Since you’re purchasing the clinic in an asset sale and creating a new entity with a new name, insurance contracts will be affected. Most payor contracts are tied to the specific legal entity, not just the clinic's operations or brand. Here’s what to know: First, contract assignment isn’t automatic. Payors typically don’t allow contracts to transfer in an asset sale, so you’ll likely need to re-credential the new entity. To maintain continuity, start the re-credentialing process as soon as possible. Some payors may fast-track the process if the clinic’s staff, services, and patient base remain consistent. Second, reach out to key payors where being in-network offers a competitive advantage. They can provide details on their specific requirements and timelines. Lastly, since claims may be processed out-of-network during re-credentialing, plan for temporary cash flow impacts. Working with a healthcare consultant or legal advisor familiar with payor contracts can help ensure the transition goes smoothly.

I should actually clarify as I misspoke. This will be an add-on acquisition joining into our current clinic. That being said, our clinic is not contracted with all the payors the acquisition target is. Not sure if that changes anything from your perspectives.

Either way, I appreciate the insights and recognize this as a key focus of due diligence and a key priority upon closing.