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investors.
• Market presence. Groups that operate out of multiple locations and
have strong brand recognition within their markets are considered
better candidates for investment or acquisition, especially if they don't
depend entirely on the reputation of any single practitioner. They're
better able to address the needs of a larger referring physician popula-
tion, and their patients, for better utilization of fixed costs and
increased profitability.
Keeping pain management legal
A pain management group's compliance with certain legal concerns
will determine the ease with which a transaction can be completed at
the highest valuation. Focus on these areas.
• Coding and billing. A heightened level of government scrutiny over
pain management practices means that any adverse coding and billing
issues may cast disastrous shadows over a deal's progress. While a
healthy practice should have a regular compliance audit protocol in
place, it's advisable to perform an audit 6 to 12 months before enter-
ing into negotiations with an investor to remedy any potential issues.
Even if the investor engages its own auditor, the pain management
group's audit will better prepare it to respond to any identified issues.
• Licensing, regulation and ownership. Many states require that pain man-
agement practices, their owners and their investors be licensed or reg-
istered with the state. Closing the transaction without the proper
licensure in place can harm both the practice and the investor. An
investor's legal team will plan for these requirements, but the prac-
tice's physician-owners should not rely solely on the investor's coun-
sel. Due diligence is also required with regard to the state's drug stor-
age, advertising and prescribing regulations.
L E G A L U P D A T E
