Buying into a medical practice: key legal and financial checks for physicians

Health care attorney Dennis Hursh discusses his article, "What every physician should know before buying into a medical practice." He emphasizes that while receiving an offer to buy into a practice is typically a significant honor and opportunity, physicians must perform thorough due diligence to avoid potential pitfalls. Dennis advises physicians and their legal counsel to meticulously review corporate governance documents, watching for unequal voting rights or tiered partnership structures that limit influence. He stresses the importance of examining shareholders' or operating agreements to ensure the buy-in methodology matches the buy-out methodology and scrutinizing employment agreements for parity with other partners. Dennis also highlights the necessity of assessing the practice's financial stability by reviewing recent tax returns and understanding any existing debt, distinguishing legitimate asset-backed debt from potentially problematic borrowing used to pay owners. The core message is to celebrate the opportunity but proceed with caution and professional advice to ensure the buy-in is a genuinely good deal.

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