Medical Practice Acquisition

searcher profile

February 04, 2024

by a searcher from Widener University in Jefferson Township, PA, USA

How are medical practice acquisitions structured if the acquirer does not hold a medical license? Does anyone have experience/recommendations in the structuring of medical practice deals?

0
12
131
Replies
12
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
It depends on what the laws are for the particular state you are looking to buy the practice in. Some have varying rules on who can own a medical practice. But in most states what happens is the buyer sets up a Medical Service Organization or "MSO". You own the practice assets through the MSO but you need to contract with a provider who legally owns the patients. The MSO handles all billing and collections for the doctor who owns the patients and pays a percentage of revenues collected to the doctor. This is the very simplified version of how this works. You should talk to an attorney to get more specific details. I hope this helps.
commentor profile
Reply by an investor
from Boston College in Steamboat Springs, CO 80487, USA
Depending on the state laws, a common structure is that there is a Medical Service Provider (MSP) that contracts with the parent entity. The MSP is doctor owned and employs all necessary medical professionals. Its contract allows it to bill out labor expenses at cost to the parent entity. The parent owns basically everything else like leases, equipment, and customer relationship. At least that is one structure I've seen.
commentor profile
+10 more replies.
Join the discussion