It can be difficult to make a list of current expenses that the health care system is willing to accept. In addition, the list of excluded assets (which retains the practice) and excluded liabilities (obligations that the hospital will not assume) can be the subject of extensive negotiations. The evaluation of the goodwill of the practice must also be agreed by the selling and buying doctors. Goodwill is an intangible asset that is typically based on the size, location, reputation, patient market, and profitability of the practice. This topic is often at the center of the discussion and negotiation between a seller and a buyer. The valuation should be used as a reference for negotiating the purchase price. If you are selling, consider hiring an appraisal company to do an evaluation of your practice. The external valuation process, analysis and valuation report generated should identify your firm`s tangible and intangible assets, including equipment, accessories, furniture and goodwill. Physicians must also determine the structure of the transaction and determine whether the purchase and sale agreement should be a share purchase agreement or a purchase of securities.

If the practice is sold, the physicians who sell and buy the practice should determine who is ultimately responsible for the medical records when selling or transferring the practice. If medical records are transferred as part of a practice sale with other assets, the seller must inform and inform patients of this transfer in order to comply with the terms of the asset purchase agreement, licensing requirements, and ethical and professional standards. Your guide to securing assessment, changing roles, transferring medical records, and informing patients. Ownership of medical records is determined by state laws, licensing regulations, and court orders. Physicians who sell or close their practice must ensure that the patient`s control, ownership, and right of access to their medical records are specifically considered prior to the transfer or storage of medical records in order to comply with applicable state laws. Physicians, as guardians and owners of medical records, must pay particular attention to the destruction, storage or transfer of medical records when their practice is sold or closed. As a rule, the purchase of a practice is not an acquired asset and is therefore not sold to the buying physician. The selling physician usually retains the receivables and there should be a mechanism in the seller`s contract to ensure that the buying physician is able to collect claims from the selling physician after closing. Negotiating assigned contracts can become a big deal. Unfortunately, some doctors sign the document presented to them by the seller as a ”standard contract”. As a result, practices are often signatories to long-term commitments without termination provisions. The provisions on compensation also protect the purchasing doctor in the event that the selling doctor violates the declarations or guarantees of the purchase-sale contract.

It is most likely expected that a selling physician will indemnify and hold harmless the purchasing physician for losses incurred as a result of misrepresentations by the selling physician. Whether you`re entering a salaried practice or retiring after a long career as a solo practitioner, understanding your firm`s selling options will help you maximize value before you bring it to market. A common problem is agreements on electronic health records. If the health system implements an electronic record-keeping system, it is extremely unlikely that it will want to accept the assignment of a long-term commitment to another electronic registration system. At the same time, doctors certainly don`t want to continue paying for an EMR system out of their own pockets after the practice is sold. I was able to convince the EMR companies to terminate the agreement in the future (after the information was transferred to the hospital`s EMR) and convinced the hospital to pay for the EMR during this time. However, this is rarely a simple negotiation. Before concluding the sale of a practice, it is important that the seller and the buyer agree on the role and involvement of the selling physician after closing. If the selling physician leaves the geographic area and no longer practices medicine, it is unlikely that a formal written employment or counselling agreement will be required. However, if the selling physician remains in the area and the purchasing physician wishes to continue working with the selling physician during the transition, physicians should consider signing an employment or consultation contract that sets out the roles and responsibilities for the physician`s sale and the duration of such an agreement. Physicians who close their practices should consult with their lawyer about the storage or destruction of medical records and consider giving patients notice and the opportunity to retrieve their medical records prior to the closure of the practice. After identifying the patients who have been treated by the practice, doctors should send a notification letter that: In addition, due to the nature of many small practices, it is not uncommon for personal property in the practice to belong to the doctor.

In many cases, even if the practice owns the asset, the physician still considers it to be their property. For example, laptops and artwork are often ”not for sale,” even if the practice has paid for it. Making a list of what is being sold can be difficult. Often this is done as a room through the inventory of the room. One of the first things you need to do is make sure that everything that has been agreed in the letter of intent is included in the final agreement. According to state and federal regulations, patients must have the option to choose another doctor and have a copy of their medical record sent to the doctor of their choice. Medical records should not be transferred to another physician or practice without the patient`s consent. While this is not something most doctors want to spend their time on, doctors should read and consider the representations and guarantees of the agreement. Even though you may consider these provisions as insignificant legal language, these provisions of the agreement can entail significant liabilities if they are not correct.

In particular, physicians may not be aware of privileges over their assets, including privileges over physical assets contained in bank documents for lines of credit or other loans. If you make sure there are no privileges, the hospital can claim compensation (see below) if the privileges are discovered. Selling your doctor`s office is an important decision on your part. This is an important transaction that requires your special attention and the involvement of an experienced lawyer. Commitments not to compete with each other are very likely to be included in both the purchase contract and the employment contract. These covenants must be the same so that you do not accidentally accept a longer or geographically more extensive covenant in any of the documents. Compensation terms must be negotiated. Many health systems want unlimited and indefinite compensation for the ”first dollar.” Your lawyer will try to limit the survival of these benefits (i.e. how long you are held liable), to limit the amount of compensation (at least to ensure that the indemnification obligation does not exceed the purchase price) and to insert a provision on materiality to prevent the ”nickel and diming” of the health care system (p.B. If it turns out that a few dollars of supplies were not available when it closed, you don`t need to cut a check for a few dollars). In this regard, various trade-offs are possible, ranging from limiting the total amount of the indemnification obligation to developing ”baskets” of various potential liabilities, so that, for example, an undetected tax privilege does not require a refund that exceeds the value of the underlying fixed assets. Reach this list of milestones to keep your firm`s sales plan on track.

Physicians should review state and federal regulations on record keeping. When selling or closing a practice, physicians should review their medical records to ensure they contain all the information and documents required by federal and state law. When selling or closing a practice, the question is often raised of who actually owns the medical records. In general, the physical medical record is the property of the physician or business unit responsible for creating and maintaining the medical record. Selling physicians should use fair market value (FMV) when evaluating a practice and determining the purchase price to meet regulatory requirements. While there is no clear criterion for a firm`s FMV, FMV should result from negotiations between a knowledgeable buyer and seller and should not take into account the volume or value of referrals by the attending physician. Other practice assets that are not normally included in the sale of a firm may include: The following topics play a key role in the sale or closing of your firm: The purchase and sale agreement should include the responsibilities of all parties involved before and after closing. .