Wednesday, August 26, 2009

Dental Office Purchase Questions - 100% Medicaid

I am planning to acquire a dental office which is a 100% medicaid practice. I have been handed over a copy of the P&S by the broker. I took some time of to go through the contents of the P&S and had a few questions to put forth before you.

What is a fair compensation to be paid to the seller, if he would work with me during transition?

35-40% of their collections or 25-30% of their prod (since it's medicaid), depending on how many days they work you'll have to decide on their professional expenses like malpractices, dues, licenses, ce, etc. basically treat them like you would want to be treated as an assoc + a little premium on the %.

What are key points to be considered before we sign a non-compete?

One key point = consult a dental attorney! See the recent post by Jason Wood.

What are key points to be considered before we sign a Restrictive covenant?

One key point = consult a dental attorney! See the recent post by Jason Wood.

What are key points to be considered before we set a formula for AR collection?

Not sure what you mean, however, one key point = consult a dental attorney! See the recent post by Jason Wood.

What happens to employee benefits like vacation, sick leave, CE etc after I take them over for the current year?

Depends on what you negotiate, generally the seller is responsible for resolving those liabilities and you as the buyer will have to decide what you'll want to offer them when you hire them. That said I bet Jason Wood has some GREAT advice.

Your valuable inputs will be of great help since I am going through P&S. I am also hiring an attorney for the same, but I feel personal experiences makes the difference.

Thanks in advance.

In my opinion your questions are very specific and need specific advice, NOT opinions based on what others have experienced.....unless those experiences come from a dental attorney! All these are legal issues as they involve a legal agreement.

Good luck.

This first appeared on Dentaltown.

Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com

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