This guide walks through each stage and links to our detailed articles on every major issue. Whether you are selling to a hospital, a private equity platform, or another physician, the same questions determine how much you keep, how much control you retain, and how free you are to leave.
What are the stages of selling a medical practice?
| Stage | What happens | Learn more |
|---|---|---|
| 1. Preparation | Clean up billing, contracts, licenses, and financials; understand value | Due diligence, valuation |
| 2. Choosing a buyer | Compare hospitals, private equity, and physician buyers | Comparing buyers |
| 3. Letter of intent | Lock in price, structure, rollover, compensation, and exclusivity | Letters of intent |
| 4. Structuring | Address CPOM, the MSO, tax structure, and fraud and abuse rules | CPOM, MSOs, F reorganizations, Stark and AKS |
| 5. Definitive documents | Negotiate the purchase agreement, management agreement, employment agreement, and equity documents | Post-sale employment, rollover equity, non-competes |
| 6. Closing and transition | Obtain consents, update enrollments, transition staff and patients | Covered below |
How should I prepare to sell?
Preparation protects price. Buyers will review your billing and coding, payer contracts, licenses and enrollments, compliance history, and financials. Issues they find usually become price reductions or escrows. Start with our guides to due diligence when selling a medical practice and how a medical practice is valued, and avoid the common mistakes physicians make when selling.
Who should I sell to?
Hospitals, private equity buyers, and physician buyers structure offers differently, and the headline price is only one part of the comparison. See selling to a hospital, private equity, or another physician and selling your practice to private equity.
What belongs in the letter of intent?
The LOI sets price, structure, rollover, post-closing compensation, and exclusivity. Your leverage is highest before you sign it. Read our guide to letters of intent when selling a medical practice.
How do health care laws shape the deal?
State corporate practice of medicine rules explain why private equity buyers use a management services organization. The Stark Law and the Anti-Kickback Statute require that the price and post-closing payments reflect fair market value rather than referrals. And many S corporation sales use an F reorganization for tax reasons. See the corporate practice of medicine, what an MSO is, Stark and the Anti-Kickback Statute in a practice sale, and F reorganizations in a medical practice sale.
What happens after closing?
Most sellers keep practicing. Your new employment agreement, rollover equity, and restrictive covenants work together and should be negotiated together. See your employment agreement after selling your practice, rollover equity, and non-competes after selling a medical practice.
What happens at closing?
- Signing the purchase agreement and related documents, including any management services, employment, and equity agreements
- Payoff of practice debt and release of liens
- Payer, landlord, and other third-party consents
- Medicare, Medicaid, and commercial payer enrollment updates and change-of-ownership notices; a physician group generally must report a Medicare change of ownership within 30 days
- Licenses, registrations, and permits; a DEA registration, for example, does not transfer without DEA's written consent, and CLIA laboratories generally must report a change of ownership within 30 days
- Custody arrangements for medical records
- Malpractice tail coverage for pre-closing claims
- Transition of staff and communication with patients
When should I involve a lawyer?
Before you sign a letter of intent, and ideally before you start talking with buyers. That is when structure, compensation, and exclusivity are still open, and when you have the most leverage to shape them.
The complete series
- 7 Common Mistakes Physicians Make When Selling a Practice
- Selling Your Practice to Private Equity
- What Is an MSO?
- How to Value a Medical Practice
- The Corporate Practice of Medicine in a Practice Sale
- Stark Law and the Anti-Kickback Statute in a Practice Sale
- Letters of Intent When Selling a Medical Practice
- Rollover Equity: What Physicians Should Know
- Your Employment Agreement After Selling Your Practice
- Non-Competes After Selling a Medical Practice
- F Reorganizations in a Medical Practice Sale
- Due Diligence When Selling a Medical Practice
- Selling to a Hospital, Private Equity, or Another Physician
About Med Contract Law. Med Contract Law is a focused practice group of McCormick Law & Consulting dedicated to physicians. We represent physicians and physician-owned practices in practice sales, private equity and MSO transactions, and hospital acquisitions. In these matters, we represent the physician side, not hospitals or health systems, so our focus is always on the physician's side of the deal.
If you are considering selling your practice, a confidential conversation early in the process can protect both your price and your future. Schedule a confidential consultation to talk through your situation.
Unfamiliar with a term? See our physician contract and practice sale glossary.
Frequently asked questions
How long does it take to sell a medical practice? It depends on the buyer, the size of the practice, regulatory structuring, and how prepared the seller is. Payer consents and enrollment updates often drive the timeline.
Do I need a lawyer to sell my medical practice? Yes. Practice sales involve health care regulatory rules, complex structures, and post-closing employment and equity terms that directly affect your outcome.
Will I keep practicing after the sale? Most sellers do, under a new employment agreement with the buyer or the clinical entity.
Do you represent physicians outside Virginia and North Carolina? Our attorneys are licensed in Virginia and North Carolina. We advise physicians on matters we are authorized to handle, including matters involving federal law and transactions with connections to other states. When a matter requires advice on another state's law, we work with appropriately licensed counsel or undertake that work only when applicable law permits.