Acquiring a medical practice can be one of the fastest ways to grow a physician group, add a new service line, or expand into a new Florida market. It can also be one of the fastest ways to inherit someone else’s compliance problems.

In a practice acquisition, the real value, and the real risk, sit in contracts, billing records, licenses, and referral relationships that never appear on a balance sheet. This checklist walks through the legal due diligence areas that buyers of Florida medical practices should review before signing a purchase agreement.

This article is general information for healthcare providers and is not legal advice. Every transaction is different.

Planning an acquisition? Book a complimentary consultation with our healthcare transactions team.

1. Start With the Deal Structure

How you buy matters as much as what you buy.

• Asset purchase vs. equity (stock or membership interest) purchase. An asset purchase generally lets the buyer choose which assets and liabilities to take on. An equity purchase usually means inheriting the entity’s history, including billing liabilities and pending claims.
• Who can own the practice. Florida limits ownership of professional entities and imposes licensing rules on certain clinics. Confirm the buyer entity is eligible to own and operate the practice, and whether the practice qualifies for an exemption from Florida’s Health Care Clinic Act licensure requirements.
• Management services organization (MSO) arrangements. If the deal involves an MSO or investor-backed platform, the structure must respect professional licensure, fee-splitting, and referral laws.
• Antitrust and notice filings. Depending on deal size and market share, federal premerger notification or other regulatory review may apply.

2. Entity, Corporate, and Ownership Records

• Articles of incorporation or organization, operating agreements, bylaws, and amendments
• Good standing with the Florida Department of State (Division of Corporations)
• Cap table and any options, warrants, or buy-sell agreements
• Minutes, shareholder or member consents, and any prior ownership transfers
• Liens, UCC filings, judgments, and pending litigation searches

3. Licensure, Registrations, and Permits

Confirm that every professional and facility authorization is active, in the right name, and transferable or replaceable.

• Florida medical, osteopathic, nursing, and other practitioner licenses, plus any disciplinary history with the Department of Health or the Board of Medicine
• Health Care Clinic Act license or documented exemption
• DEA registrations and Florida controlled substance compliance
• Pain management clinic registration, office surgery registration, or accreditation where applicable
• CLIA certificates for in-office laboratories
• Radiation, imaging, and dispensing practitioner permits
• Local business tax receipts and any zoning or occupancy approvals

Many of these do not transfer automatically to a new owner. Build lead time into your closing timeline.

4. Medicare, Medicaid, and Payer Enrollment

Reimbursement is often the most valuable and most fragile part of a practice.

• Medicare enrollment and change of ownership. Review how the transaction affects Medicare enrollment (CMS-855 filings) and whether the buyer will assume existing billing numbers and any associated liabilities.
• Florida Medicaid enrollment. Confirm how the transaction affects Medicaid provider enrollment and whether new enrollment is required.
• Commercial payer contracts. Check assignment and change-of-control clauses, notice requirements, and whether payers must consent. Some payers will require the buyer to credential from scratch.
• Revenue continuity. Confirm which providers bill under which numbers so that collections do not stall after closing.

5. Billing, Coding, and Reimbursement Audit

A sample-based billing review by qualified coding and legal professionals can reveal exposure that would otherwise become the buyer’s problem.

• Audit and payment-recoupment history (Medicare contractors, UPICs, RACs, Medicaid, commercial payers)
• Pending or past payer investigations, subpoenas, civil investigative demands, or self-disclosures
• Coding patterns, modifier use, incident-to billing, and E/M level distribution compared with peers
• Unrefunded overpayments, including compliance with the federal 60-day overpayment rule
• Accounts receivable aging and collectability
• Whether the seller will provide an indemnity, holdback, or escrow for pre-closing billing liabilities

6. Fraud and Abuse Compliance: Stark, Anti-Kickback, and Florida Law

Fraud and abuse laws are where practice acquisitions most often go wrong. Review:

• Federal Stark Law (physician self-referral) and the federal Anti-Kickback Statute
• Florida Patient Self-Referral Act and Florida’s anti-kickback and patient brokering statutes
• Every financial relationship between the practice and referral sources: medical director agreements, leases, equipment rentals, lab or imaging arrangements, marketing agreements, and ancillary service ownership
• Whether each arrangement is in writing, signed, at fair market value, and commercially reasonable
• Whether the purchase price itself could be viewed as payment for referrals, which is why an independent valuation is important
• Any existing compliance program, hotline, training records, and internal investigations

Concerned about Stark or Anti-Kickback exposure in your deal? Request a fraud and abuse review or call (561) 455-7700.

7. Exclusion and Sanction Screening

• Screen the practice, owners, providers, and employees against the OIG List of Excluded Individuals and Entities, SAM.gov, and Florida Medicaid sanction lists
• Request the seller’s historical screening logs
• Confirm no one involved in billing or patient care is excluded or debarred

Employing or contracting with an excluded person can result in overpayment liability and civil monetary penalties.

8. Employment, Physician, and Contractor Agreements

• Physician employment and independent contractor agreements, including compensation formulas and productivity bonuses
• Whether key physicians will remain after closing and on what terms
• Restrictive covenants. Florida generally enforces reasonable non-competes under Fla. Stat. § 542.335, but enforceability depends on a legitimate business interest and reasonable scope. Healthcare-specific rules may also apply, so have them reviewed
• Seller non-compete and non-solicitation provisions in the purchase agreement
• Wage and hour classification, benefit plans, PTO liabilities, and pending employment claims
• Immigration status documentation for visa-dependent providers

9. Medical Records, HIPAA, and Data Security

• Medical record custody and transfer. Florida requires practitioners to follow specific rules when a practice is sold or closed, including patient notice about record custody. Plan the notice and transfer process before closing
• HIPAA privacy and security policies, risk assessments, business associate agreements, and breach logs
• Any past breach notifications, OCR complaints, or state data breach reports (including under the Florida Information Protection Act)
• EHR vendor contract, data ownership, migration rights, and license transferability
• Records retention practices and storage of minors’ and legacy records

10. Real Estate, Leases, and Equipment

• Lease assignment rights, landlord consent, term, renewal options, and personal guaranties
• Whether the lease is with a related party and at fair market rent (this ties back to Stark and Anti-Kickback review)
• Equipment leases and financing, liens, and maintenance obligations
• Environmental, biomedical waste, and OSHA compliance
• Ownership of signage, phone numbers, domain names, and online listings

11. Insurance and Malpractice Exposure

• Current malpractice coverage, claims history, and whether coverage is claims-made or occurrence-based
• Tail coverage for the seller and departing providers
• Open claims, notices of intent, and Florida pre-suit proceedings
• General liability, cyber liability, and workers’ compensation coverage
• Representations and warranties insurance, where appropriate

12. Vendor and Contract Review

• Management, billing, staffing, and consulting agreements
• Assignment and termination provisions, auto-renewal terms, and exclusivity clauses
• Pharmaceutical, device, or supply agreements that may carry compliance obligations
• Telehealth platform agreements and multistate licensure considerations

13. Tax and Financial Review

• Federal and state tax filings, payroll tax compliance, and any open audits
• Quality of earnings analysis and reconciliation of collections to billings
• Valuation methodology and support for fair market value
• Allocation of purchase price among assets (including goodwill and covenants not to compete)

14. Protect Yourself in the Purchase Agreement

Due diligence only helps if findings are reflected in the contract. Key protections include:

• Detailed representations and warranties on compliance, billing, licensure, and ownership
• Indemnification for pre-closing liabilities, backed by escrow, holdback, or offset rights
• Closing conditions tied to licensure, payer enrollment, and key physician retention
• Transition services and seller cooperation covenants
• Clear allocation of responsibility for refunds and overpayments identified after closing

More from Florida Healthcare Law Firm

• Healthcare Business Transactions
• Mergers and Acquisitions Transactions
• Regulatory Compliance
• Florida Health Care Clinic Act: Licensing and Exemptions
• Florida Medical Practice Sale Attorney: Legal Checklist
• All healthcare law articles

Talk to a Florida Healthcare Transactions Attorney

Buying or selling a medical practice in Florida? Florida Healthcare Law Firm represents physicians, medical groups, hospitals, and clinics in practice acquisitions, due diligence, and regulatory compliance. We work only with healthcare providers and businesses.

Call (561) 455-7700 today (toll free (888) 455-7702) or schedule a complimentary consultation to discuss your transaction before you sign a letter of intent.

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