Buying a Medical Practice

A Four-Part Legal Checklist Series — West Coast Health Law

Buying a medical practice is one of the most significant transactions a physician will undertake, and it sits at the intersection of business and heavily regulated healthcare law. This four-part series builds a complete picture in sequence of what you'll need to know going in.

Part 1 of 4 — The Framework

Understand the deal before you dive into the details.

Buying a medical practice is a major professional and financial commitment, and the transactions that go smoothly are the ones that start with a clear framework. Before you reach the legal rules or the fine print, you need to understand what kind of deal you are doing and what questions it raises. This first post lays out that framework — the foundation the rest of the series builds on.

Know what you are actually buying. A medical practice sale can be structured as an asset purchase or an equity (stock or membership interest) purchase. The choice drives the tax treatment, which liabilities follow the practice, and which contracts and licenses transfer. Most buyers of medical practices favor asset purchases to limit exposure to the seller's historical liabilities, but the right answer depends on the facts.

Map the moving parts. Even a small medical practice is a bundle of interlocking pieces. Before negotiating, identify the components that will each need their own attention:

• The clinical business — patients, providers, payer contracts, and goodwill.
• The regulatory layer — licenses, enrollments, and California's ownership rules for medical practices.
• The assets — equipment, technology, records, and the premises lease.
• The people — employed and contracted providers and staff.

Set the sequence. A good acquisition moves in a predictable order: agree on structure and price in a letter of intent, perform diligence, negotiate the definitive agreement around what diligence reveals, then close and transition. Each stage in this series maps to that sequence.

How West Coast Health Law can help: We help physician buyers frame an acquisition correctly from the outset — choosing the right structure and identifying the issues that will matter before the deal gains momentum. The next post looks at the legal rules that constrain how a California medical practice can be bought and owned.

 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.