In the work
Payer contracts, the production behind each physician, and a structure that keeps clinical decisions with physicians. How a buyer reads an independent practice or specialty group, and what to settle while the choice is still yours.
Hospitals, health systems, insurers and sponsor-backed groups have been acquiring practices for a decade. Their diligence teams arrive knowing exactly what to test. A physician owner who has already tested it negotiates from a much firmer position.
of U.S. physicians were employed by hospitals or other corporate entities as of January 1, 2026.
Physicians Advocacy Institute and Avalere Health, 20261
In a physician practice each of them touches patients, partners and regulators at once. Evidenced early, each one becomes a reason to pay.
In medicine, the legal structure is part of the price.
Many states limit who may own a medical practice or employ physicians, under what is called the corporate practice of medicine doctrine. Buyers that are not physician-owned commonly use a management services organization: the MSO acquires the non-clinical business and provides administrative services, while a physician-owned professional entity keeps the clinical practice. The rules differ from state to state and are tightening in places. Oregon's SB 951, signed June 9, 2025, bars an MSO and its affiliates from owning or controlling a majority of a practice it serves, and Oregon already requires advance notice to the Oregon Health Authority for certain healthcare transactions.5 A buyer prices the time and conditions any review adds before closing. None of this is legal advice; healthcare counsel in your state answers it.
The payer contracts set how far the revenue can travel.
A buyer breaks collections into commercial, Medicare, Medicaid and self-pay, then by plan within each class. Commercial contracts at competitive rates with clean renewal histories carry the valuation. A single commercial plan supplying a large share of collections, or a rate schedule that has not been renegotiated in years, reads as exposure. Medicare changes flow straight to revenue: for 2026, CMS finalized a 2.5% efficiency reduction to work RVUs on services that are not time-based, which reaches many procedural codes while exempting office visits.
A buyer counts whose hands the revenue passes through.
Work RVUs and collections by provider show how concentrated the practice is in its founders. When two senior partners generate most of the production, the buyer prices their ages and their intended years of practice. Many structures pair the purchase price with a reset of physician compensation after closing, so the difference between what the partners took home and what they will be paid becomes part of the earnings being bought. Employment terms, restrictive covenants where state law allows them, and a credible plan for recruiting associates decide how much of that production a buyer can count on.
Imaging, lab, infusion and surgery center income is underwritten line by line.
Ancillaries often carry the margin in a specialty practice, and buyers value them. They also separate them from professional fees, because federal self-referral (Stark) and anti-kickback rules govern how designated services are referred and billed and how physicians may share in the income. Buyer's counsel will test whether each line fits within an exception or safe harbor. A surgery center interest frequently sits in its own entity with other owners, its own operating agreement and its own consents.
The quality of earnings and the coding review are read together.
Beside the accountants, a buyer typically retains coders to audit a sample of charts against what was billed. Undercoding is revenue the practice has been leaving behind. Coding above what the documentation supports is a liability, and buyers answer it with an escrow, an indemnity or a lower price. Prior payer audits, any recoupments and a compliance program that actually runs all shape how the buyer reads the risk.
Physicians ask me about price first. The better first question is structure: who owns what, how you are paid after closing, and what happens to your patients.
In a medical practice, a buyer reads the claims before it meets the physicians.
Coding patterns, denials, payer letters and the remittance file show how the revenue is earned, and how much of it would hold up under audit.
Each one is fixable, and every one is cheaper to fix before a buyer finds it.
A specialty platform wants your physicians and your payer contracts. A health system wants coverage and referrals. A family office wants partners who stay. Choosing the reader that fits the practice, and the physicians in it, comes first.
Joins a specialty group its sponsor already owns, usually through an MSO, folding your physicians, payer contracts and ancillaries into the platform. PESP tracked 148 private equity deals in outpatient care in 2025, among the three busiest healthcare categories it follows.4
Builds a regional specialty group around yours. Needs physician leaders beyond the founders, an administrator who runs operations, and billing and compliance that hold up as the group adds practices.
A larger independent or multi-specialty group that pays for physicians, referral patterns and payer leverage it can actually capture. Health systems buy practices too, within the fair market value limits that govern their physician arrangements.
A listed healthcare services company or insurer with a care delivery arm. Active in some specialties and regions, quiet in others. Pays for scale, clean claims data and compliance that will read well to its auditors.
Long hold and partners who stay. Often keeps the practice name patients know, and values governance that leaves clinical decisions with physicians.
Rare in medicine, and worth saying plainly. Ownership rules, payer credentialing and the weight of physician production make most practices a poor fit for a single searcher. An independent sponsor with healthcare experience is the more common version of this lane.
Buyer archetypes adapted from The Buyer Lane Preparation Map, Cordis Institute. The Cordis MRI runs your own financials through each lane before you choose one.
Most of it happens long before a buyer reviews a chart. Started early, it protects the practice, the partners and the patients at the same time.
Agree among the partners on who intends to keep practicing, and for how long. Model physician pay after a sale so the trade between price and compensation is understood before a buyer proposes it. Start recruiting the associates who will carry the patient panel.
Commission an outside coding and documentation review, correct what it finds and keep the record. Have healthcare counsel review ancillary arrangements and the entity structure in every state where you practice.
Separate partner-level spending from practice expense and file the support beside each adjustment. Tie collections by payer and by provider to the remittance data a buyer's accountants will pull.
Run the practice through each buyer lane and weigh structure, compensation, governance and continuity of care. Confirm any state notice timeline, then prepare what the chosen buyer will read first.
Owners hesitate to make this call for one reason: what happens if the team, a customer or a competitor finds out. So the rule is simple, and it holds from the first email.
You see the return, the entity structure and the estate plan. We see how a buyer will read the same company. A Value Protection Study gives your client a buyer's view of the business while there is still time to act on it, and keeps you at the center of the plan.
It falls in a range, and where you land depends on which buyer is reading the practice and what compensation the physicians accept after closing. The largest drivers are payer mix and contract rates, how concentrated production is in the founding physicians, the quality and regulatory footing of ancillary income, and how the coding review reads. The Cordis MRI runs your own financials through each buyer lane and returns that range.
Private equity backed specialty platforms and their add-ons, larger independent and multi-specialty groups, health systems, listed healthcare services companies and insurers, and family offices. Search funds are uncommon in medicine. Each prices the same practice differently and treats physician pay, governance and the practice name differently.
A management services organization owns the non-clinical side of a practice, such as billing, staff, facilities and technology, and provides those services under contract. In states with a corporate practice of medicine doctrine, it lets an outside investor buy into the business while a physician-owned entity keeps the clinical practice. How much control an MSO may exercise varies by state, so healthcare counsel should review the structure early.
In most structures, yes. The purchase price is commonly paired with a new compensation plan after closing, and the difference between the two is a large part of what the buyer is paying for. Seeing that trade modeled before a letter of intent lets each partner decide with full information.
They value it, and they review it separately from professional fees. Federal self-referral and anti-kickback rules govern how these services are referred and billed and how physicians share in the income, so buyer's counsel will confirm each line fits an exception or safe harbor. Ancillary income with a clear footing holds its value through diligence.
Often, and the rules vary by state. Some states restrict who may own a practice or control its clinical decisions, and some require notice to or review by a state agency before certain healthcare transactions close. Oregon, for example, enacted new limits on MSO ownership and control in 2025. Your healthcare counsel confirms what applies to your practice; nothing here is legal advice.
That depends heavily on the buyer and the terms you negotiate. Physician retention, clinical governance, the practice name and staff employment can all be addressed in the agreements, and owners who raise them early tend to keep more of what they care about. Continuity of care is a legitimate selection criterion when choosing a buyer lane.
Once a practice goes to market, closing typically takes the better part of a year, and a state transaction review can extend that. The preparation before launch matters more than the process itself: partner alignment, a coding review and clean payer data usually take one to three years to put in place.
One call about your company and your timeline. You decide what happens next.