Sell a Healthcare Business in Indianapolis, IN

Healthcare Businesses We Help Owners Sell

Many healthcare companies in central Indiana do well over $1 million a year and draw steady buyer interest. The owners we hear from usually run one of these:

• Home health and home care agencies
• Physical, occupational and speech therapy clinics
• Dental practices, general and specialty
• Primary care and specialty medical practices
• Behavioral health, staffing and other outpatient services

Each has its own rules, but they share one thing. A buyer is paying for patient relationships and steady reimbursement, and both have to survive the change in ownership.

Who Buys Healthcare Companies

The buyer pool is wider than many owners expect, and each type looks at the business differently.

• Private equity backed groups building networks of practices or agencies
• Regional health systems and larger provider groups
• Individual clinicians who want to own instead of work for someone else
• Associates or partners already inside the practice

Group buyers often pay more, but they usually ask the selling provider to stay on for a period and may tie part of the price to results after closing.

How Healthcare Companies Are Valued

Value comes from earnings, as with any company, but the quality of those earnings gets a hard look. Buyers check payer mix, collection rates, referral sources and how much revenue depends on one provider.

A practice where the owner sees most of the patients is worth less than one where several providers share the load. The same goes for an agency that relies on one referral source.

A business valuation built for healthcare will separate the owner's clinical pay from true business profit, which is often where the real number hides.

Licenses and Payer Contracts

Licenses and payer agreements often don't simply pass to a new owner. Depending on the deal structure, the buyer may need new approvals, or the existing ones may need to be updated with the right agencies.

Medicare, Medicaid and commercial insurance contracts each have their own steps for a change of ownership. Getting the order wrong can create a gap in billing that hurts cash flow for months.

CMS, for example, has special enrollment rules when a home health agency changes majority ownership within 36 months of enrolling. Rules like that can change which deal structure makes sense.

These details depend on your license type and payers, so a healthcare attorney should map them out early. Asset vs stock sale is often decided around them.

Credentialing Takes Time

New owners and new providers usually have to be credentialed with each payer before they can bill under their own names. That process can take a while, and it rarely speeds up at the end.

Building credentialing into the timeline from the start avoids a closing date that leaves the buyer unable to bill. It's also one reason sellers often agree to a transition period.

Patient Records and Privacy

Buyers need to understand your patient base without seeing private information. Early on, they get summary data: visit counts, payer mix and revenue by service, with no names attached.

HHS guidance treats due diligence for a sale to another covered entity as part of health care operations under HIPAA. Even so, what gets shared and when should follow your attorney's advice.

The purchase agreement should also spell out who keeps the records after closing, how long they're kept and how patients are told about the change.

Keeping Providers and Staff

In healthcare, patients follow people. If a key provider or a long-time office manager leaves during the sale, the buyer may lower the price or walk away.

• Keep the sale confidential until key people need to know
• Review employment agreements, non-competes and pay before going to market
• Consider retention bonuses for providers who stay through the transition
• Plan how and when patients and referral sources hear about the new owner

What Buyers Check in Due Diligence

Healthcare due diligence goes deeper than most. Buyers and their lenders want proof that revenue was earned and billed properly, because past billing problems can follow the business.

• Billing and coding practices, often reviewed with a sample of claims
• Past payer audits, refunds or open recoupment requests
• Licenses, certifications and inspection or survey results
• Provider contracts, referral arrangements and compliance policies
• Accounts receivable aging by payer

Pulling these together before going to market saves weeks later. It also lets you explain anything unusual on your terms instead of the buyer's.

Your Building and Equipment

Many practice owners also own the building. You can sell it with the business, keep it and lease it to the buyer, or sell it separately. Each choice changes the price and your income after the sale.

Imaging, dental chairs and other costly equipment add value when they're in good shape and paid off. Leased equipment needs consent to transfer, so check those agreements early.

Getting Ready to Sell

Owners who start a year or two ahead usually do better. That time can go toward adding providers, spreading out referral sources and cleaning up billing records.

Our exit planning page covers the steps that apply to any company. For larger groups and multi-site practices, M&A advisory runs a broader search for buyers.

Getting Started

Find out what your practice or agency could sell for with the free valuation form, or call (317) 555-0186. Every conversation is confidential.