Challenges and Considerations
As we move forward into 2009, the economy continues to alarm and the physician shortage crisis looms large. These factors may underlie the surge in practice acquisitions and the trend toward physician employment.

An article published in Physician’s News Digest by Attorney William Maruca stated that “many physicians are looking for ways to legally preserve or increase their income in an era of shrinking reimbursement and increasing costs. New forms of affiliations between hospitals and physicians are emerging that bear little resemblance to the 1990s style practice purchases.”

Many hospitals and healthcare organizations are being approached by private practice physicians and physician groups seeking refuge from the uneasy state of the economy and what lies ahead– seeking safe harbor through acquisition.

A critical component to insure that a successful, viable transition occurs is by performing due diligence – taking the necessary steps to ensure all parties involved in the practice, including physicians, allied health staff, administrators – even clerical staff, have been thoroughly screened. It is strongly recommended that a due diligence background check on the practice or business be performed as well, whether it is a corporation, LLC or other type of business entity.

Negligent Credentialing
There is an “unprecedented focus on how hospitals credential and privilege physicians” according to the Health Care Update, provided by the law firm of Katten Muchin Rosenmann LLP. The author speculates that “Plaintiffs are looking for as many deep pockets as possible in a malpractice action, and hospitals have the deepest.” Negligent credentialing can be avoided and taking specific steps will allow facilities to minimize their risk for such claims.

Thorough background checks are a critical component in the process which will provide assurance that good faith handshakes will provide organizations with increased revenue, rather than excess “baggage” – whether it is patterns of litigious partners, impending medical malpractice suits, patterns of reckless or violent behavior or individuals on the brink of financial disaster – a crisis that can impact every business and personal decision an individual makes.

A comprehensive, compliant background report, supplied by an experienced partner in the industry, will help to ensure a successful practice transition for all parties involved.