Acquiring a healthcare business, from a medical practice to a clinic, lab, or pharmacy, is not like buying an ordinary business, and in Florida the regulatory layers add up. You are taking on a regulated enterprise, and the risks sit in places a financial review will not reveal: billing history, referral relationships, licensure, and patient records. A deal that looks sound on a spreadsheet can carry seven-figure overpayment exposure.

This checklist is written for physicians, group practices, hospitals, private equity-backed platforms, and management companies evaluating a Florida acquisition. Use it to structure your diligence request list and to know where to push back before you sign. For transaction support, see our healthcare business transactions and mergers and acquisitions services.

1. Confirm the Entity and Ownership Structure

Start with who actually owns what.

• Review articles of organization or incorporation, operating agreements, and cap tables.
• Confirm that the practice entity is properly formed. Professional services in Florida are often delivered through professional associations or professional limited liability companies under Chapter 621, Florida Statutes, and ownership must match licensing rules.
• Identify any management services organization (MSO) arrangements and confirm they are structured to respect Florida licensing, fee-splitting, and referral restrictions.
• Check for liens, UCC filings, and pending litigation against the entity and its owners.

Why it matters: Ownership defects can invalidate the deal structure, and an improperly structured MSO can create regulatory exposure for both buyer and seller.

2. Verify Licenses, Registrations, and Clinic Status

Every license must be confirmed independently, not accepted on the seller’s word.

• Physician and practitioner licenses through the Florida Department of Health, with disciplinary history reviewed.
• Health care clinic licensure with the Agency for Health Care Administration (AHCA) under the Florida Health Care Clinic Act, or documentation supporting a valid exemption. Unlicensed clinics may face claim denials and the inability to collect on insurance claims.
• Office surgery registration, pain management clinic registration, and any other specialty-specific requirements.
• DEA registrations and Florida controlled substance compliance. Note that DEA registrations generally do not transfer automatically in an acquisition.
• CLIA certificates for in-office laboratories.
• Radiation, imaging, and pharmacy-related permits where applicable.

Why it matters: Licensure gaps can surface after closing, and a change of ownership may itself trigger new filing and approval requirements.

3. Audit Billing, Coding, and Reimbursement

Billing compliance is usually the largest source of hidden liability.

• Review Medicare, Medicaid, and commercial payer billing for a defined look-back period.
• Commission a sample-based coding audit by a qualified outside reviewer.
• Request all payer audit letters, recoupment demands, and Targeted Probe and Educate (TPE) or RAC correspondence.
• Ask whether any overpayments were identified and whether they were refunded within the federal 60-day overpayment rule timeline.
• Confirm any history of Office of Inspector General (OIG) exclusion checks for all staff and contractors.

Why it matters: In an asset purchase, the buyer may avoid some liabilities, but a buyer that assumes the seller’s Medicare provider agreement generally takes on its overpayment history as well. Structure and indemnities should reflect this.

4. Analyze Stark Law, Anti-Kickback, and Florida Referral Risk

Referral and compensation arrangements deserve line-by-line review.

• Physician compensation agreements, medical directorships, and space and equipment leases should be in writing, at fair market value, and not tied to referrals where prohibited.
• Evaluate ancillary services such as lab, imaging, physical therapy, and DME against the federal Stark Law, the Anti-Kickback Statute, and the Florida Patient Self-Referral Act of 1992.
• Review marketing and patient acquisition arrangements under the Florida Patient Brokering Act.
• Identify any in-office ancillary services exception reliance and confirm it is properly documented.

Why it matters: Stark is a strict liability statute. Even an innocent technical violation in a legacy arrangement can taint claims and become the buyer’s problem.

Concerned about a Stark or Anti-Kickback issue in a target practice? Our attorneys review compensation and referral arrangements before closing. Call (561) 455-7700 or book a diligence review.

5. Review Payer Contracts and Enrollment

• Determine which payer contracts are assignable and which require consent or a new application.
• Plan the Medicare change of ownership (CHOW) process and Florida Medicaid enrollment steps early. Delays here can interrupt cash flow after closing.
• Confirm credentialing timelines for acquired physicians so revenue is not paused.

6. Examine Employment Agreements and Restrictive Covenants

• Review physician and staff employment agreements, compensation structures, and retention terms.
• Evaluate non-compete and non-solicitation provisions. Florida generally enforces reasonable restrictive covenants under Section 542.336, but healthcare-specific limits apply and recent legislative changes have altered the landscape, so covenants should be reviewed by counsel for enforceability before you rely on them.
• Confirm worker classification for independent contractors and locum providers.
• Identify change-of-control bonuses, severance obligations, and unpaid compensation.

Why it matters: The value of a practice is often the physicians. If key providers can leave and compete the day after closing, the purchase price may not be supported.

7. Assess HIPAA, Data Security, and Patient Records

• Request HIPAA risk analyses, policies, training records, and breach logs.
• Review business associate agreements and the EHR vendor contract, including data migration and access rights.
• Evaluate compliance with the Florida Information Protection Act in addition to HIPAA.
• Plan the lawful transfer and retention of medical records, including required patient notice and records custodian arrangements under Florida Board of Medicine rules.

Why it matters: A past breach or ransomware event can bring OCR investigation, state notification obligations, and civil claims.

8. Evaluate Malpractice and Litigation History

• Obtain claims history and loss runs for the practice and each provider.
• Confirm professional liability coverage, limits, and whether coverage is claims-made or occurrence-based.
• Negotiate tail coverage for the seller and make sure the buyer’s policy covers acquired providers from day one.
• Review pending Board of Medicine complaints, payer disputes, and employment claims.

9. Review Real Estate, Leases, and Equipment

• Confirm lease assignability, remaining term, and landlord consent requirements.
• Verify that lease terms meet fair market value standards if the landlord is a referral source.
• Inventory equipment, check for financing liens, and confirm maintenance and calibration records.

10. Check Tax, Financial, and Insurance Matters

• Review payroll tax compliance, sales and use tax, and any outstanding assessments.
• Reconcile revenue figures to payer remittances, not just practice management reports.
• Confirm accounts receivable are collectible and properly assignable.
• Understand how the purchase price allocation affects tax outcomes for both parties.

11. Structure the Deal to Match the Risk

Diligence findings should drive the contract. Common protections include:

• Asset purchase versus equity purchase, chosen with successor liability in mind.
• Specific indemnities for pre-closing billing and regulatory liability.
• Escrow or holdback tied to audit results.
• Representations and warranties on compliance, licensure, and referral arrangements.
• Closing conditions tied to payer consents and licensing approvals.

12. Plan the Transition

• Prepare required patient notifications about the change in ownership or custody of records.
• Coordinate payer notifications, signage, and updates to licensing and enrollment records.
• Set a 90-day integration plan covering billing, credentialing, and compliance policies.

Special Considerations by Business Type

The checklist above applies to most healthcare acquisitions. These additions apply when the target is not a standard physician practice.

• Multi-site clinics: Confirm clinic licensure for each location and how a change of ownership is handled with AHCA, along with medical director and clinic director requirements. See our Healthcare Business Operations work.
• Laboratories: Review CLIA certification, Florida clinical laboratory licensure, and billing practices for referred testing. See Laboratory Compliance.
• Pharmacies: Pharmacy permits and controlled substance registrations generally do not carry over to a new owner, and PBM contract terms and audit history deserve close review. See Pharmacy Law.
• DME suppliers: Check Medicare supplier enrollment, accreditation, surety bond requirements, and documentation practices. See Durable Medical Equipment.
• Private equity and MSO platforms: Focus on the management fee structure, fair market value support, physician retention and equity rollover, and how clinical control stays with licensed practitioners. See Mergers and Acquisitions Transactions.

Frequently Asked Questions

How long does healthcare due diligence take in Florida?

Most deals take 30 to 90 days, depending on practice size, payer mix, and how organized the seller’s records are. Billing audits and payer consents are usually the longest items.

Should we structure the deal as an asset purchase or an equity purchase?

An asset purchase can limit exposure to historical liabilities, but contracts, enrollments, and permits may need to be reissued or assigned. An equity purchase keeps existing entities and enrollments intact but brings the target’s history with it. The right choice depends on what diligence finds.

Do Medicare and Medicaid enrollments transfer automatically to a buyer?

No. A change of ownership requires filings with CMS and Florida Medicaid, and a buyer that accepts assignment of a Medicare provider agreement generally takes on its overpayment history.

Does a Florida medical practice need a health care clinic license?

Many do, unless an exemption applies, for example certain practices wholly owned by licensed practitioners. Never assume an exemption. Confirm it from the facts and the seller’s documents.

What are the biggest red flags in a healthcare acquisition?

Unlicensed clinic status, undocumented referral or compensation arrangements, unreconciled overpayments, heavy reliance on a few departing physicians, and an unreported data breach.

Key Takeaways

• Florida medical practice acquisitions require layered diligence across corporate, regulatory, billing, and privacy issues.
• Billing history and referral arrangements typically carry the greatest hidden exposure.
• Licensing and payer enrollment timing can determine whether revenue continues smoothly after closing.
• Diligence should directly shape the purchase agreement, not sit in a separate file.

Related Resources

• Florida Health Care Clinic Act: Licensing and Exemptions
• Florida Patient Brokering Act: Legal Risks for Healthcare Businesses and Referral Arrangements
• Starting a Telehealth Business in Florida: Legal Structure, Licensing, and Compliance
• Healthcare Business Operations
• Outside General Counsel Services
• Healthcare Disruptors Series
• Meet our healthcare attorneys

Authorities Referenced

• Florida Health Care Clinic Act, Chapter 400, Part X, Florida Statutes (§§ 400.990–400.995)
• Florida Patient Self-Referral Act of 1992, § 456.053, Florida Statutes
• Florida Patient Brokering Act, § 817.505, Florida Statutes
• Florida Information Protection Act, § 501.171, Florida Statutes
• Restrictive covenants, § 542.336, Florida Statutes
• Professional service entities, Chapter 621, Florida Statutes
• Medical records and practice transitions, § 456.057, Florida Statutes, and Rule 64B8-10.002, Florida Administrative Code
• Stark Law, 42 U.S.C. § 1395nn
• Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)
• 60-day overpayment rule, 42 U.S.C. § 1320a-7k(d)
• Medicare change of ownership, 42 C.F.R. § 424.550
• CLIA, 42 U.S.C. § 263a
• HIPAA, 45 C.F.R. Parts 160 and 164

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Talk to a Florida Healthcare Transactions Attorney

Florida Healthcare Law Firm represents physicians, physician groups, hospitals, and clinics in practice acquisitions, sales, and joint ventures throughout Florida. If you are evaluating a healthcare transaction, call us at (561) 455-7700 or schedule a confidential consultation before you sign a letter of intent.