Strategies for selling and consolidating physician practices

The changing dynamics of healthcare service delivery is forcing many physicians to consider selling their practices to hospitals or health plans or consolidating them with other practices. Besides being subject to the corporate and tax requirements that apply to the sale of any business, the sale of physician practices is also subject to Federal fraud and abuse and self-referral laws. Several sale strategies are available to physicians who desire to sell or consolidate their practices, including asset sales, stock sales, forward mergers, drop down consolidations, spinoffs, and statutory mergers. Each strategy has advantages and disadvantages, but whichever strategy is chosen, both sellers and buyers must ensure that tax issues are addressed and that the transaction complies with the requirements of Federal anti-kickback and self-referral laws.