When you are looking to purchase a medical business or sell one the buyer needs to understand your business. Typically the more the buyer understands the business, the better assessment they can make and the smoother the transaction will go.
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Here is a typical checklist for that:
SAMPLE DUE DILIGENCE CHECKLIST FOR MEDICAL BUSINESS ACQUISITION
Background of the Medical Business
1. Review of Corporate Records – Articles of Incorporation, Operating Agreements, Bylaws, Shareholder Roster, Board Meeting Minutes, Shareholder Agreements,
2. Organizational structures, departments and employees,
i. Organizational Chart
ii. List of all Employees, with compensation, benefits, and accrued vacation
3. Financial Statements, audited financial statements going back at least 3 years;
NOTE: Copies of All bank statements will help the buyer understand and confirm that the numbers are real.
4. List of hard assets – furniture, fixtures, and equipment,
5. Copy of all Key contracts, including
a) Employment Contracts
b) Management Contracts
c) Equipment leases
d) Vendor Agreements
e) Maintenance Agreements
f) Software Agreements
g) Payor Contracts (price lists removed)
h) Support services (billing, computers, and personnel)
NOTE: Review check register for prior 6 months to confirm all contracts are accounted for.
NOTE: Confirm that copies of contracts are fully executed
6. Payor mix
7. Copy of Check Register for prior 6 months
8. Real Estate portfolio – list of properties owned and leased
9. Copy of all insurance policies
10. Malpractice history and claims history on all licensed professionals going back 10 years
11. Regulatory Filings,
12. Copy of license, permits, and certifications of the Medical Business
NOTE: Also include a copy of all correspondence for the prior 5 years from the licensing/permitting/certification agency
13. Review of debt instruments/bond covenants,
14. Current insurance and malpractice history of the Medical Business
15. Threatened or pending litigation
16. Staff qualifications
17. Copies of letters from CMS, OIG, and other government agencies for the prior 5 years
18. All liens, mortgages, bonds, and UCC Lien filings.
At Mirza Healthcare Law Partners, one of our strengths is conducting Mergers & Acquisitions in Medical Businesses. Our attorneys have done mergers and acquisitions and led teams to make the transaction happen. Whether you need assistance on a large acquisition or a small one, we cater to the needs of the client. Ask us about our 140-point due diligence checklist!
Here is an informative video seminar on How Mergers and Acquisitions are Done in Healthcare.
Hosted by the South Florida Hospital News and Healthcare Reporter.
For more information reach out to our team by Cell/Text at 954-634-2370.
Unlock professional legal advice with a personalized 1-hour legal consultation for just $675. Get clarity and confidence, identify risks, explore your options (including DIY solutions), and gain a clear roadmap to tackle your legal challenges. Take the first step towards a secure, informed future. Book your appointment today!
Ben Mirza is not only an attorney but was formerly a CPA, with a masters of public health. There are over 100,000 attorneys in Florida, less than 500 of whom were ever Certified Public Accountants, and even less have the trifecta combination of law/finance/strategic healthcare background. The benefit of this combined and layered skillset works well for clients who want an advocate to approach the issues holistically.
