Healthcare: Buy-Sell Agreements
Medical practices with more than one physician should have a buy/sell agreement in place.
This is a legal contract that spells out the transition that will happen if a current physician owner leaves the practice and also how a new doctor may be admitted as an owner of the practice. This structuring will be important to everyone that works there and will help ensure a calm and secure transition when that may occur.
The agreement may be forgotten or just filed away but once a major change is expected, often this is the agreement that will determine how the changes will go forward.
If there is a current buy/sell agreement in place, it should be reviewed and updated periodically (annually is recommended) by an attorney and careful consideration should be given to changes in the market since it was last reviewed. Healthcare reform, service reimbursement concerns, Medicare cuts and wRVU costs may all result in needed changes to the buy/sell agreement currently in place
These agreements are usually financially driven, affect both the physician owner and the practice itself and contain valuation details. Agreements may also have tax consequences that will affect all physicians attached to the practice.
An attorney will help the physician owners create or modify an agreement with their long-term concerns and objectives as a priority. It will also give the physician owners peace of mind and the security they need to make long term plans for success.