I just finished giving a key note address today at the Florida Institute of CPAs annual healthcare conference. My seminar was on physician buy sell agreements. The main thing I wanted to get across to the particpants was that they need to REVIEW their buy sell agreements each and every year.
Most agreements haven’t been reviewed for years and with healthcare changing so rapidly, most are out of date. Make sure the buy out financial arrangement is reasonable and well as the pay out terms. Also make sure the agreement is tax-advantaged for both the practice and the departing physician, Finally, make sure all non-financial issues are adequately covered. These includes things like restrictive covenant, terminating a physician, and how to handle temporary disability, just to name a few.