🏥 Buying or Selling a Healthcare Practice: Legal Checklist for Providers

Whether you’re expanding your footprint or preparing for retirement, buying or selling a healthcare practice is one of the most complex transactions you’ll ever face. From compliance and credentialing to contracts and corporate structure, healthcare deals come with layers of regulation that standard business sales don’t touch.

Here’s your essential legal checklist to make sure your deal is smart, compliant, and built to last.

1. Choose the Right Transaction Structure

There are two primary deal types:

Asset Purchase:

• Buyer purchases specific assets (equipment, records, goodwill)

• Seller retains liabilities and legal entity

• Often preferred for liability and tax efficiency

Stock/Membership Interest Purchase:

• Buyer acquires the entire legal entity

• Includes all assets and liabilities

• Simpler if practice has key contracts, licenses, or insurance plans tied to the entity

📌 Get tax and legal advice early to choose the right structure for your goals.

2. Conduct Thorough Due Diligence

Buyers should verify:

• Licensure and regulatory compliance

• Credentialing status with payors

• Existing vendor/service contracts

• Pending investigations or audits

• Lease terms and equipment obligations

• Financials (revenue, collections, overhead)

• Employee agreements, compensation, and non-competes

📌 If it’s not in writing—or if it doesn’t check out—don’t rely on verbal assurances.

3. Address Patient Records & HIPAA Compliance

Patient records are a critical asset—but they’re highly regulated.

Plan for:

• Secure transfer or custodianship of patient charts

• Required notices to patients (state laws may apply)

• Who retains access after the sale

• Ongoing HIPAA compliance and breach protection

📌 Get a Business Associate Agreement (BAA) in place if records are accessed pre-sale.

4. Review Contracts & Assignability

Not all agreements transfer automatically.

Check whether:

• Vendor and lease contracts can be assigned or need landlord consent

• Employment agreements are transferable

• Payor contracts require re-credentialing or notification

📌 Plan for transition periods so patient care and revenue aren’t disrupted.

5. Handle Employment & Staff Transitions

Buyers should decide:

• Which employees to retain

• Whether to offer new contracts or assume existing ones

• How to handle unused PTO or retirement benefits

• Whether to include restrictive covenants (non-competes, non-solicits)

📌 Be sensitive—employees are often key to retaining patients and preserving goodwill.

6. Finalize a Strong Purchase Agreement

This should include:

• Purchase price and payment terms

• Allocation of assets (for tax purposes)

• Representations and warranties

• Indemnification provisions

• Transition services or seller involvement

• Escrow or holdback arrangements (if applicable)

📌 This is where your attorney earns their keep—details here will protect you long after the closing.

Final Thoughts

Buying or selling a healthcare practice is not a standard business deal. It’s a regulated, emotionally charged, detail-heavy process that demands smart planning and experienced legal guidance.

Need help structuring your deal, reviewing contracts, or planning your exit? I help Arizona healthcare providers navigate practice sales from start to finish—so you can move forward with confidence.

Hurley Law Group
Healthcare Transactions & Legal Counsel for Arizona Providers
📞 308-383-1867
🌐 hurleylawgroup.com
✉️ eric@hurleylawgroup.com