Hospital Acquisitions of Physician Practices: Practical Tips for Both Parties

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Introduction -

Throughout the United States, hospitals and physicians are engaging in various affiliation models in order to adapt to the changes resulting from health care reform. While these affiliations take many different shapes and sizes, one of the most popular structures is the acquisition of a physician practice by a hospital. This article identifies several practical considerations that hospitals and physician practices should consider when contemplating such an acquisition.

Asset Purchase Versus Ownership Interest -

Purchase Practice acquisitions either can be structured as a purchase of the assets of the physician practice or as a purchase of the ownership interest of a practice (stock in a corporation or membership interest in a limited liability company). The structure chosen has a significant impact on the tax burdens of each party, as well as who is responsible for the liabilities of the practice. Further, in advising your client, it is important to understand the other party’s tax structure and its effect on your client’s preferred transaction structure.

Originally published in BNA’s Health Law Reporter, 22 HLR 1352, 09/12/2013.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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