Due diligence on a medical clinic or family practice

Due diligence on a family practice sits on top of a fact most buyers underestimate going in: the physicians’ billing relationships with the provincial health plan are not assets you can inspect and acquire, they are personal arrangements you have to independently re-establish. What diligence can and should verify is everything around that fact — whether the panel is genuinely as attached as claimed, whether the charts are properly held, and which arrangements actually belong to the clinic as opposed to the departing physician personally.

Verify panel attachment, not just panel size

Request the underlying rostering and attachment data behind the patient panel, not just a summary patient count, and compare it against actual utilization — how many of those patients have genuinely been seen in the last one to two years. A large nominal panel with weak recent utilization tells a very different story than a smaller panel with strong, consistent attachment, and it changes what a realistic revenue projection for an incoming physician actually looks like.

Confirm chart custody and the consent trail

Request confirmation of who currently holds custodial responsibility for the electronic medical record system, what the process is for adding an incoming physician as a custodian, and what patient notification or consent steps have already been taken or still need to happen. A record system with unclear custody, or one where the vendor relationship itself is uncertain, can create real delay at exactly the point where a buyer expects to be finalizing rather than untangling administrative loose ends.

Separate clinic-level arrangements from physician-level ones

Go through every group billing, facility and payment-model arrangement line by line and classify each one as either structured at the clinic level — genuinely transferable — or tied personally to the departing physician — not transferable, and something an incoming physician will need to newly establish. Alternative-payment-plan status is the arrangement most often mischaracterized in this exercise, since it is enrolled to the individual physician with the provincial ministry and does not move to a buyer’s physician automatically, whatever the seller’s summary materials imply.

Review the employment records behind the administrative team

Request personnel files for administrative and clinical support staff, not just a headcount summary — confirm there are no outstanding grievances, pending terminations or undocumented verbal commitments that would transfer to the buyer along with the employment relationship itself. A practice’s administrative continuity is a real asset, but it is only as reliable as the paperwork behind it, and gaps here tend to surface as disputes in the months right after closing rather than during the sale process itself.

Diligence looks different depending on who is buying

A physician buying the practice they will personally operate is mainly confirming that the clinical and administrative picture matches what was represented, since they bring their own registration and billing relationship with them and are not depending on anyone else’s. An MSO or non-physician-investor buyer carries an added layer of diligence: beyond the business numbers, the deal depends on a physician actually being ready to hold the professional corporation on the terms assumed, with a management or services agreement between the MSO and that physician drafted and ready to execute at closing. Skipping that second layer, and discovering only after closing that no physician is actually committed to the arrangement, is one of the more common ways an MSO-structured acquisition unravels.

Confirm registration status for every physician involved

Pull current registration status directly from the relevant provincial college for every physician expected to continue practising at the clinic, and for yourself or any physician you are bringing in as the incoming clinician. In Ontario this means checking with the College of Physicians and Surgeons of Ontario directly rather than relying on a seller’s representation; every other province runs its own college and its own registry, and a claim of “good standing” is worth confirming independently before it is relied on.

Findings that most often change a family practice deal

• Panel attachment that is materially weaker on close inspection than the headline patient count suggested
• Alternative-payment-plan status the incoming physician cannot re-establish on comparable terms
• No credible successor physician identified where the current owner is not staying on
• Chart custody or consent documentation that is incomplete or has never been formally addressed

Weighing what a finding actually means

A finding that panel attachment is somewhat weaker than represented is usually a valuation and projection issue, addressed through price rather than abandonment. A finding that no incoming physician has been identified and none can realistically be recruited on the sale’s timeline is a structural problem with the deal itself, not something a purchase-agreement clause can fix. Registry searches, corporate-status confirmation and a review of the disclosure schedule against what diligence actually turned up round out the process the same way they would for any acquisition, but in a family practice the panel-attachment and registration findings carry more weight than almost anything else on the list.