Buying a practice

[firewicket]

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Can someone who has experience and is willing to offer advice for buying a solo practice with a PSA in place please PM me. I’d like to understand the process and avoid any pitfalls.

 

[medgator]

What are you buying exactly if there is no technical? The AR?

 

[nkmiami]

Maybe, you are in essence buying a "job" not a practice.

 

[Neuronix]

I ran into a lot of jobs that paid a salary and then you had an opportunity to buy into a cut of the outstanding group professional fees. It also gave you some voting control or whatever in the practice. These were always pitched to me by people who had technical partnerships but were no longer offering it. It always seemed like a scam to me.

 

[firewicket]

It appears quite common to have an S Corp that has a professional service contract with a hospital. You would be buying the S Corp and all associated contracts. Thus also all the professional fee components of the reimbursement. There would be no capital investment purchase (no technical component because there is no owned machinery)

 

[Gfunk6]

You can’t sell something that you don’t own. The physician or physician group doesn’t own the PSA, the hospital does.

IMO, such arrangements are a scam.


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[firewicket]

Let’s say you are buying everything for 1$. How is this a scam? Again, please PM if you have experience with this and can offer some constructive advice.

 

[Neuronix]

Let’s say you are buying everything for 1$. How is this a scam? Again, please PM if you have experience with this and can offer some constructive advice.

Consult with a lawyer. This stuff is very situation specific and very high stakes.

 

[firewicket]

Yes, of course I will (and have) consult with a lawyer. Just wondering if I can gain some knowledge from others. This is basically akin to buying into a partnership ( group practice) but instead of being a partnership you are buying the whole practice.

 

[medgator]

Let’s say you are buying everything for 1$. How is this a scam? Again, please PM if you have experience with this and can offer some constructive advice.

$1 would seem reasonable, but like everyone has posted, I'd still check with a healthcare contract lawyer in your state.

 

[Burt Radnolds]

I like the sound of $1, because I agree that "buying into" a practice with professional only revenue is essentially a scam. (I apologize if this is unproductive as far as answering your question, just don't want you to be had)

 

[Reaganite]

You need to speak with a good accountant and/or attorney. Irrespective of the cost of the buy-out (even if it's $1), there are definite liability issues you assume when taking over a corporation. That's the stuff you need to be particularly careful about.

As far as the value of a strictly professional corporation, it is really tough to estimate that for Rad Onc. I definitely would not agree with the usual multiple of gross calculation people use in practice buyouts in other specialties. The big issue with Rad Onc is that you are so reliant on someone else to provide a location for you to practice. If you lost the PSA with the hospital or the damn hospital burns down, the corporation and contracts are worthless since you'd have nowhere to treat. That being said, taking over the corp may be the only legitimate way to break into an area, so I think there is some inherent value to it. There are some locales where many of the rad onc insurance networks are closed to new physicians. They will, however, usually allow you to add a new physician to an existing contract.

Perhaps you can tie the buyout to the availability of a center to treat. It may be a long shot, but you could offer "x" over a certain number of years, but the repayment would be nullified if you lost the PSA or didn't have a place to treat patients. I've seen one buyout structured like that.