Part 3 of 4 — The Common Mistakes

Where medical practice acquisitions go wrong — and how to avoid it.

Knowing the framework and the rules is only useful if you can spot where deals actually break down. The mistakes below recur across medical practice acquisitions.

• Ignoring Corporate Practice of Medicine. Structuring a deal that puts practice ownership or clinical control in the hands of an unlicensed party is the single most consequential error — it can render the arrangement unlawful regardless of the paperwork.
• Underestimating credentialing timelines. Assuming payer enrollments transfer at closing, then discovering re-credentialing takes months, can starve a newly acquired practice of cash flow.
• Thin due diligence. Relying on the seller's representations without verifying financials, coding and billing practices, licensure, and litigation history leaves the buyer holding undisclosed liabilities.
• Overlooking billing and coding exposure. Buying a practice with a history of improper coding or billing can transfer audit and repayment risk — particularly in an asset deal that was assumed to be clean.
• A weak or expiring lease. Failing to confirm the premises lease will transfer on workable terms can undermine a practice whose location and patient base are central to its value.
• No non-compete or transition support. Letting the seller walk away without appropriately scoped covenants or a transition period risks the goodwill and patient relationships you paid for — keeping in mind California's limits on restraints of practice.
• Treating the purchase agreement as boilerplate. Failing to translate diligence findings into representations, indemnities, and closing conditions leaves the buyer without recourse when problems surface.

How West Coast Health Law can help: We help buyers anticipate these failure points before they become disputes — pressure-testing the structure, the diligence, and the agreement. The final post ties the series together into an implementation checklist.

This article is provided for general informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. For guidance on a specific matter, contact West Coast Health Law.

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