I have spent more than 25 years practicing medicine and building surgical businesses. If there is one thing I want physicians to understand about buying or selling an ambulatory surgery center, it is this: You can negotiate an impressive price and still make a disappointing deal.
The money you actually keep, the obligations you inherit, and the freedom you have afterward are buried deeper in the agreement. Having recently worked through an ASC sale myself, these are the ten places I would tell any physician to look before signing.
Here are 10 “insider” secrets to buying and selling an ASC; and making it a great deal for the doctors on both sides.
1. Stop asking only, “What multiple did you get?”
Physicians love comparing multiples. I understand the attraction. A single number makes a complicated transaction sound easy to judge.
But I want to know what sits behind that number. Does the seller keep the cash? Are receivables included? Is debt being paid off? How much of the price arrives at closing, and how much depends on something happening later?
As a buyer, I want to know what earnings will remain after the seller leaves and operating costs are adjusted. As a seller, I want to know what will actually reach my account. A multiple starts the conversation. It cannot finish it.
2. Draw a hard line through the receivables.
A procedure performed before closing may not be paid until months afterward. Unless the agreement addresses that clearly, yesterday’s work can become tomorrow’s argument.
I want the contract to identify who owns those collections, how payments will be traced, when money must be forwarded, and who can inspect the supporting records. The date of service gives both sides a practical starting point.
The buyer also needs operating cash while new collections build. I would work through that funding requirement before closing. A seller can deserve the old receivables while a buyer still needs enough liquidity to run Monday’s schedule.
3. Keep the reimbursement and the bill together.
Implants make this especially important. A device may have been used before closing, its vendor invoice may still be unpaid, and the insurance payment may arrive afterward.
I would put those cases on a separate schedule and decide explicitly who receives the reimbursement, pays the device invoice and bears any associated recoupment risk.
The same discipline belongs in prepaid contracts. If the buyer chooses to continue a service and receives its benefit, the agreement should address the unused prepayment. Neither physician should discover after closing that he is financing the other’s operations.
4. Count the shelves. Then count them again.
An inventory clause sounds unremarkable until somebody starts pricing what is sitting in the supply room.
I want a baseline count and a final count using the same method. Ordinary supplies, expensive specialty items, consigned products, and excluded equipment deserve separate attention. Both sides should understand what is included in the price and what requires an additional payment.
For equipment, I want an itemized list. “The orthopedic equipment” leaves too much room for disagreement. A named tower, instrument set or C-arm is something both sides can identify. That clarity also lets the buyer confirm that the equipment remaining is sufficient for the intended case mix.
5. Buy the center you intend to operate.
An ASC’s history can be impressive without matching its buyer’s plans.
Remember, you are allowed to negotiate the specific services you are selling/buying, with an additional premium added for each specialty as the need might be. I would ask which specialties will remain, which surgeons are expected to continue, and what staffing, equipment, and approvals the future operation will require. If a service line is leaving, that needs to be reflected in the operating plan and purchase economics.
Any agreement to help with regulatory applications should define the work, the costs, and the limits. Cooperation has value. An approval that remains outside either physician’s control should never be treated as a promised result.
6. Decide what happens to the building before it becomes leverage.
When the real estate and the surgical business are held separately, I treat them as two connected negotiations.
If both are being sold, I want the closings coordinated so neither side ends up with half the intended transaction. Many a buyer or a seller has found himself in a Faustian bargain when only half the intended transaction materialized. If the seller keeps the property, I want the lease settled early: rent, increases, renewals, repairs and assignment rights.
The buyer needs dependable occupancy. The seller needs dependable payment and a clear division of property expenses. Leaving those questions until the business price is settled invites a second negotiation when everyone is already tired.
7. Put an expiration date on uncertainty.
Diligence is necessary. An indefinite option to buy someone else’s business is expensive for the seller.
I want a defined diligence period, a realistic closing timetable, and a clear account of the conditions that remain. Financing deserves a direct conversation. If the buyer’s obligation depends on obtaining a loan, the agreement should say so. If it does not, the buyer needs to understand that commitment before signing.
I also want control to change hands through a coordinated closing process. Signed documents, confirmed funds, banking authority and operational access must fit together. Enthusiasm is no substitute for a closing checklist.
8. Protect the first operating day as carefully as the closing day.
You closed. The money is coming in. You are ecstatic. But be aware. A successful wire transfer does not staff an operating room.
Before closing, I want to know who is providing anesthesia, which employees are staying, who controls the schedule, and how billing, medical records, credentialing files, and system passwords will be handed over.
A temporary service arrangement is an option between the two parties. It can help preserve continuity, but it needs performance expectations and a workable backup if coverage fails. Staff deserve timely, coordinated communication as well. Their confidence affects whether the buyer receives a functioning center or spends the first month trying to reconstruct one.
9. Negotiate the restrictions while you can still change them.
I read every restriction as a physician who expects to keep working.
What happens to existing practices? Can either party recruit staff? Can the buyer bring in physician partners, pledge ownership to a lender, or transfer interests for estate planning? Which activities require consent?
I want those answers before the excitement of closing takes over. Restrictions should protect an identifiable interest and accommodate the legitimate plans of both sides. Their legal reach needs counsel’s attention, but their practical consequences need the physicians’ attention. We are the ones who must live with them.
10. Decide who pays when something goes wrong.
I never assume that selling an ASC ends every exposure associated with owning it.
Old claims, payer demands, tax matters and disputed representations can surface later. I want the agreement to distinguish those risks and explain how claims are made, how long protections last, and what limits or exceptions apply.
Insurance deserves the same scrutiny. I want written confirmation of how pre-closing services remain covered and when the buyer’s coverage begins. If part of the purchase price will be held back, both sides should understand the amount, purpose and release conditions. These decisions directly affect the seller’s proceeds and the buyer’s protection.
The deal I want is one where the seller receives the agreed value, the buyer understands the business he is taking over, and the staff and patients experience a competent transition.
That takes more than a strong price. It takes the willingness to work through uncomfortable details while both doctors are still sitting at the same table.
Dr. Ahmed is a gastroenterologist and CEO of Atlas Surgical Group in St. Louis.
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