An Austin Firm Dedicated to
Health Care Law

  1. Home
  2.  → 
  3. Health & Health Care Law
  4.  → 3 tips to increase the odds of a successful healthcare merger

3 tips to increase the odds of a successful healthcare merger

 Healthcare businesses, like any other business, often switch hands. Sometimes one business buys out the other and in other situations it may be a merger. Whatever the details of the transaction, it is important for those involved to keep in mind that a healthcare business is much different than other forms of business. One of the most important differences is the fact that there are specific regulations and rules that must be followed.

Tips to help better ensure a successful transition include:

#1: Fit.

Complete due diligence to better ensure the target business is the right fit for your business plans. Important questions can include:

  • What are you looking to achieve with this transaction?
  • Does the organization use information technology to support quality improvements?
  • How are the readmission rates, if applicable?
  • How does the organization handle staff accountability in the event of a poor outcome?

#2: Reimbursement and revenue.

Reimbursement for healthcare services is different than most other services. Instead of just sending your client a bill, your patient is often billed through an insurance provider — which might be the federal government. There are strict rules for reimbursement and a failure to follow these rules can result in loss of the contract.

Make sure the target organization knows and follows these rules and make changes if needed. Check the integrity of the reported revenue for any concerning practices like upcoding or duplicate billing. Make sure the organization has good practices when it comes to properly documenting billing procedures.

#3: Prepare to blend cultures

Each organization will have its own version of normal operations and expectations. Take the time to clearly state intended values and goals. A culture assessment can help you get a better idea of the current culture of each and provide a foundation for future plans.

Attorney John Rivas is responsible for this communication