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    Cristy Good
    Cristy Good, MPH, MBA, CPC, CMPE

    Physicians are facing increased economic and regulatory pressures that place considerable time and economic strains on them and their staff. These stressors often make running a small practice exceedingly burdensome, in terms of time and finances. These burdens may convince providers to consider other practice or employment models.

    As noted in the April issue of MGMA Connection magazine, practice owners in orthopedics and gastroenterology can expect to see a “wave of mergers and acquisitions (M&A) in their space” in the coming years. For those considering retirement, planning should begin at least three years ahead. 

    For practices caught up in the wave of M&A, issues can arise. Some of the most important to consider and address are legal and infrastructure issues, compatibility, contrasting visions and other requirements. By doing so, leaders can ensure that the new relationship is a win-win for both parties.  

    When addressing these issues, it can be beneficial to create a checklist to help guide the process. The following checklist can be used to track documents, contacts and key issues to ask a potential partner, as well as to determine who is responsible for providing each piece of information and when. 

    As with any change, communication between staff and physicians is important. If diverse groups are merging, providers should hold inclusive meetings with each other on a regular basis before, during and after the merger. A dedicated manager needs to be put in place from the start to guide the process.  

    Organization and governance

    • Articles of incorporation/LLC operating agreement
    • Bylaws and amendments
    • Board of directors minutes (prior two years)
    • List of all entities of which group owns more than 5% of equity and interest in those entities
    • Copies of trade names, service marks, 
    • DBA names or registrations
    • Shareholder agreements for buy-sell, stock options, voting, etc.
    • List of shareholders, members, issued shares

    Employees and benefits

    • List of all employees, position titles, employee status, salaries, special circumstances (e.g., FMLA, military or limited duty)
    • Copies of written employment agreements, restrictive covenants and oral agreements
    • Credentialing files and support documentation on providers
    • Copies of contracts with independent contractors
    • Info on active workers’ compensation claims or correspondence with Department of Labor, OSHA
    • Correspondence referencing employees with EEOC, NLRB or IRS (last three years)
    • Copies/summaries of all benefit plans (pension, 125 or any reimbursement)
    • Any COBRA continuations with date started, coverage and eligibility limits for coverage
    • List of agent/contact with address and telephone number for all plans

    Claims, litigation and risk management

    • Description of each pending or threatened claim to which group is a party
    • Professional liability claims history (five years)
    • Reports of investigations by any government agency or intermediary
    • Pending claims alleging regulatory violations, fraud and abuse, EPA
    • Description of other governmental or administrative proceedings with correspondence
    • Any claims in excess of $5,000 that led to a settlement or award of more than $1,000 in last three years
    • Actions related to bankruptcy, criminal, civil or administrative proceedings involving group/physician
    • Attorney’s or accountant’s letters related to audits for prior two fiscal years
    • List of all insurance policies (directors and officers liability, employer’s management risk, commercial general liability, business, bond, etc.). Submit a report containing all insurance contracts and agreements, and a comprehensive list of expiration/renewal dates or evergreen clauses for all payers.
    • List of agent/contact with address and telephone number for all policies

    Financial documents

    • Copies of all notes, loans, credit or security agreements or mortgages for debts in excess of $10,000
    • Documents related to installment purchases or capital leases
    • Prior six months bank statements for all accounts
    • Open new operating account; decide on signatures or signers.
    • Review all financed items for refinancing.
    • Prior two years’ tax returns, profit and loss statements and balance sheets for group
    • Report containing number of units by CPT code and description of services provided by each physician for one-year period
    • Operate on an accrual or cash basis for accounting method.
    • Submit a report containing the work relative value units (wRVUs) per provider.
    • Gross production statements for each physician, including all insurance contractual adjustments and other adjustments, refunds and net revenue for each provider
    • Submit a report of any other reductions to revenue other than contractual adjustments (e.g., charity adjustments and other adjustment categories; include all adjustments other than contractual). Include any bad debts incurred, write-offs or refunds.
    • Provide a report containing the actual insurance and self-pay payer mix percentages or volumes per each insurance carrier for each provider (one-year minimum, with a three-year look-back if possible).
    • Copy and submit the financial income received for each provider for the last year in W-2 format.
    • Provide a copy of the accounts payable (A/P) detail report for a one-year period. A/P reports by month or by category are preferred.
    • Patient panel by age group for each provider to capture snapshot of patients being treated
    • Number of active charts (those seen within three years)


    • Copies of all leases or subleases for equipment (medical and office) and facilities
    • Legal description of all real property owned or leased
    • Copies of any appraisals, environmental studies or reports related to property
    • Title insurance on owned property
    • Depreciation schedule and/or inventory of equipment/furnishings purchased for more than $2,500
    • Government regulations
    • Copies of all government-issued licenses, permits or accreditations (CLIA, DHHS, JCAHO, etc.)
    • Copies of all inspections, surveys or reports by a governmental or accrediting agency
    • Medical contracts with third-party payers
    • Copies of contracts for participation in Medicare and Medicaid (any states) (including UPIN and other numbers)
    • Copies of any contracts to provide/staff a medical service or directorship
    • 855B with cover letter for new satellite location
    • 855R request to terminate use of old number
    • 855R request for new number for primary care physician (PCP)
    • BCBS request to add new clinic site to PCP

    Other contracts

    • Copies of business associate agreements (HIPAA) signed by third parties or as provided to other entities
    • Executory contracts for purchasing supplies, equipment or services with annual costs in excess of $1,000
    • Any other written guarantees, indemnification agreements or cosigned notes
    • Any material contracts to which the group is a party


    • Certificate of occupancy (if required by city or state)
    • Agreements for parking spaces, common area maintenance or security associated with the building contracts
    • Building inspections (structural, electrical, engineering, pests, etc.)
    • Adequacy of electrical, plumbing, sewer, etc., for future medical facilities uses
    • Compliance with local zoning and building codes
    • Planning authority checked for restrictions, easements, rights of way, pending changes, etc.
    • Compliance with applicable ADA and local rules
    • Initial assessment of environment hazards/contamination from current and past uses
    • Assessment of natural hazards exposure (flood, seismic, etc.) and required remediation
    • Facility accreditation status with applicable public/private entities
    • Preliminary energy efficiency audit of structure(s)
    • Property and insurance assessments for fair-market valuation/replacement cost
    • Property boundary survey for purchased real estate

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