The provision of health services by entities owned by private equity or other investors requires special considerations, especially in states where the corporate practice of medicine is limited or prohibited. At the 2020 AHLA Physicians and Hospitals Law Institute in Phoenix, Arizona, PYA Consulting Senior Manager Annapoorani Bhat, along with Jeanna Palmer Gunville from Polsinelli, co-presented “Structuring and Valuing Service Arrangements Between Providers and Private Equity: Using the Captive Practice Management Model.” The presentation addressed adapting the Captive Practice Management Model to meet state-specific requirements and changing reimbursement trends, such as value-based contracting and the increased use of advanced practice clinicians. The discussion included:
- State Corporate Practice of Medicine Laws and the impact on structure.
- The business model, including investor formation of a management services organization (MSO).
- Types of arrangements and financial rationale.
- Key legal and business considerations, including due diligence risk areas and regulatory compliance.
- Appropriate valuation methodologies, and valuation considerations including the impact of changes to operations.
- Tools to finalize the arrangement.
PYA was pleased to serve as the gold sponsor of this event, which took place February 10-12.
If you would like more information about structuring and valuing service arrangements, or would like assistance in any matter involving valuation, compliance, or strategy and integration, contact one of our PYA executives below at (800) 270-9629.
