Selling a Medical 
Practice to an MSO - Triumphant Partners

Selling a Medical 
Practice to an MSO

Selling your medical practice to a Management Service Organization (MSO) can be a strategic move to secure your financial future and streamline operations. Triumphant Partners, a trusted advisory firm exclusively representing sellers, brings over 100 + years of combined experience to guide you through this process. Unlike firms serving both sides, we focus primarily on the needs of sellers—maximizing value, ensuring a smooth transition, and preserving your legacy. At Triumphant Partners, we are here to guide you through the key steps you should be aware of as a seller when partnering with an MSO, including the partnership aspect of the transaction and its legal and tax implications.

Sellers are encouraged to engage with experienced advisors or professionals throughout the process to ensure optimal outcomes.

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What Are MSOs and
Why Sell to One?

MSOs are organizations that manage non-clinical aspects of medical practices, such as billing, staffing, and compliance, allowing physicians to focus on patient care. Selling to an MSO appeals to many due to financial stability, reduced administrative burdens, and access to growth resources.

With healthcare consolidation on the rise, companies such as private equity firms and MSOs are driving consolidation in the healthcare market. MSOs are increasingly acquiring practices to expand their networks, often prioritizing operational efficiency and growth. Triumphant Partners helps you assess if an MSO sale aligns with your goals, connecting you with buyers who respect your practice’s mission, culture and patient relationships.

Types of Buyers: MSOs and Beyond

When exploring the sale of your medical practice, it’s essential to recognize the range of potential buyers and how each may impact your future. Management Services Organizations (MSOs) have become a popular choice, offering administrative services that allow physicians to focus on patient care while streamlining business operations. Many MSOs are supported by private equity firms or other corporate entities, which can introduce considerations around corporate ownership and the level of control you retain over your practice.

Beyond MSOs, other buyers may include hospitals, health systems, family offices, or even other medical practices looking to expand. Each type of buyer brings its own set of potential benefits and challenges. For example, hospitals may offer stability and resources, but could also lead to changes in practice culture or autonomy. Private equity-backed MSOs might provide significant capital and growth opportunities, but it’s important to evaluate how their management style aligns with your values and interests as a physician or owner.

Careful consideration of your goals—whether maximizing value, preserving your practice’s mission, or ensuring continuity of patient care—will help you determine which buyer is the best fit. Understanding the differences in ownership structure, management approach, and the services offered by each type of buyer is essential to making an informed decision about the future of your medical practice.

How Much Will an MSO
Pay for My Practice?

The purchase price that an MSO offers depends on revenue, patient volume, and profitability. MSOs typically base valuations on a multiple of EBITDA, often ranging in value with offers varying by specialty and location. Determining the fair market and fair market value of your practice is essential for an objective and transparent assessment, ensuring the price reflects true worth and supports fair negotiations.

Triumphant Partners conducts a detailed valuation, analyzing your financials and market trends, and negotiates to secure the best possible offer and deal structure, ensuring you’re rewarded for your practice’s unique strengths.

How Can I Sell My Medical Practice to an MSO?

Selling to an MSO involves a tailored process with Triumphant Partners. We start by evaluating your practice’s value and readiness, highlighting assets like a strong patient base or efficient operations. The owners of the practice are key decision-makers throughout this process, participating in negotiations and determining the best sale strategy.

Next, we match you with MSOs from our network that fit your vision. During negotiations, we advocate for terms that protect your interests, such as staff retention or phased exits. A management services agreement is established to clearly define operational responsibilities, legal compliance, and financial arrangements between the practice and the MSO. We manage due diligence and closing, often completing sales within 60-90 days, prioritizing your timeline and goals.
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How Much Can I Sell My Medical Practice For?

Sale prices vary based on annual collections, growth trends, market demand, practice margin and the practice’s unique characteristics.

Triumphant Partners uses industry data and your practice’s specifics to estimate a range, negotiating to exceed initial offers. We ensure you understand what drives value, such as profitability, patient base, and operational efficiency, which directly influence buyer interest and the final sale price, empowering you to make a confident decision.

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How Do I Estimate the
Value of My Medical Practice?

Valuing your practice involves assessing revenue, net profit, patient retention, and equipment condition. Triumphant Partners uses a multi-method approach—income, market, and asset-based valuations—reviewing financials and analytics to provide an accurate estimate. When analyzing comparables, we consider how the structure of the company can impact valuation outcomes. We also take into account the legal and tax form of your practice, as the form can influence both ownership and valuation. Additionally, we factor in intangible assets like your reputation, giving you a solid foundation for negotiations and highlighting the benefit of having a clear and accurate valuation for all parties involved.

Regulatory Compliance:
What You Need to Know

Navigating regulatory compliance is a critical step in the sale of any medical practice. One of the most important considerations is adherence to Corporate Practice of Medicine (CPOM) laws, which are designed to prevent non-physicians or corporate entities from owning or controlling medical practices in most states. These laws vary widely, so it’s essential to understand how they apply to your specific situation and ensure that any management services organization (MSO) or corporate entity involved in the transaction is structured to comply.

Additionally, your practice must be in full compliance with all relevant healthcare laws and regulations, including those governing patient confidentiality, billing practices, and coding accuracy. Failing to address these areas can delay or even derail a sale.

By proactively addressing regulatory compliance, you protect your interests, minimize risk, and set the stage for a successful and legally sound transition.

Risk Management During the Sale

Selling a medical practice involves more than just financial negotiations—it requires a thoughtful approach to risk management to safeguard your interests and ensure a smooth transition.

One of the primary risks is the potential disruption to patient care, which can affect your reputation and the well-being of your patients. Developing a comprehensive risk management plan is essential. This should include strategies for maintaining continuity of care, clear communication with staff and patients, and protocols for protecting patient confidentiality during the transition. Additionally, it’s important to review the purchase agreement carefully, ensuring it addresses potential liabilities and outlines responsibilities for both parties. Provisions for handling unforeseen issues, such as employee transitions or regulatory inquiries, should be included. By working closely with legal and Triumphant Partner advisors, you can identify and mitigate risks before they become problems.

Taking a proactive approach to risk management not only protects your medical practice and your patients but also helps ensure that the sale process is as seamless and stress-free as possible.

What Happens to Staff When
a Medical Practice Is Sold?

Staff transitions are the MSO’s model— retaining existing employment structures for staff is critical, including physicians, nurses, office personnel, nurse practitioners, and physician assistants. Triumphant Partners negotiates to prioritize staff retention, aligning with your desire to maintain practice culture.

We collaborate with MSOs to create transition plans, minimizing disruption and supporting your team, which also helps retain patients during the handover. Transition packages , team equity or compensation may be paid to staff, such as physician assistants and other employees, to support them during the employment transition.

Preparing for the Sale:
What to Expect

Preparation is essential for a successful sale. As part of this process, it is essential to determine whether your practice is structured as a C corporation, S corporation, professional corporation, or another type of corporation, as the legal structure can significantly impact the sale process. Expect to organize financial records, update equipment, and address operational inefficiencies. Triumphant Partners provides checklists and expertise to make your practice attractive to MSOs. We also help you plan for post-sale scenarios, whether you’re retiring or transitioning, ensuring a comprehensive approach.

Negotiating
the Best Deal

Negotiation is key to maximizing your outcome. Triumphant Partners advocates for terms that boost your payout, protect your legacy, and address the needs of both staff and patients—the structure and amount of the management fee, and the terms of payment. It’s also important to negotiate how profits will be distributed after the sale. Our experience with MSOs ensures competitive offers and a deal tailored to your priorities.

Next Steps After
Selling Your Practice

Once the sale of your medical practice is complete, your focus shifts to the next phase—transitioning ownership and planning your future. This period often involves a range of logistical and administrative tasks, from transferring records and updating licenses to introducing new management to staff and patients. Collaborating closely with the buyer helps ensure a smooth handover and addresses any questions or concerns that may arise during the transition.

As a physician, it’s also important to consider your personal and professional goals after the sale. Whether you’re planning to retire, pursue new opportunities, or continue practicing medicine in a different capacity, having a clear plan is essential. This may include strategies for managing your finances, maintaining your professional credentials, and staying connected with your medical community.

By approaching the post-sale period with intention and preparation, you can make the most of the benefits gained from selling your practice and set yourself up for a fulfilling and successful future.

 
Closing the Sale and Beyond

Ready to sell your medical practice to an MSO? Contact Triumphant Partners for expert, seller-focused assistance.

Closing involves legal reviews, contract signing, lease reassignment, and post-close planning. Triumphant Partners manages every detail for a seamless transition to the MSO, which will become the new entity that owns the practice. After the sale, the day-to-day management of the practice may remain the same, with existing staff and leadership continuing their roles. The practice’s future direction will be shaped by the new ownership, aligning with the MSO’s broader strategic goals. This sale is part of a larger trend of acquisitions in healthcare, where MSOs and private equity firms consolidate practices to expand market presence.

It is crucial to maintain clinical autonomy and physician autonomy after the sale, ensuring that physicians retain control over medical decisions and patient care, rather than prioritizing profitability. CPOM restrictions continue to play a significant role post-sale, as they limit non-physician entities from directly controlling medical practices, often requiring creative structuring to comply with legal requirements. For more information on these topics, including the impact of ownership changes and industry trends, consult resources from the Physicians Advocacy Institute. Post-sale, we offer support for adjustments like phased exits, ensuring you’re confident in your next steps.

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