Ophthalmologists approaching retirement age certainly experience pressures that could lead them to want to retire — rising inflation and declining reimbursements, to name just two — yet despite this, notes Mark E. Kropiewnicki, Esq., LLM, of Health Care Law Associates, PC, many would like to continue practicing. There’s a way with the right buyer, he says, for ophthalmologists to cash out their equity but continue to do the work they love. His Saturday AAO presentation, “Things to know before selling an ophthalmology practice,” explains how ophthalmologists can “… get the best of both worlds.”
The attorney, who has 42 years’ experience handling and advising about practice sales, buy-ins and employment agreements, walked the audience through the three categories of assets potentially for sale: hard assets, accounts receivable and goodwill. He explained what falls under each as well as valuation methods for hard-to-quantify elements such as goodwill. Goodwill values for ophthalmology practice are at an all-time high so, “…now is a great time to sell.”
In the “Nuts and Bolts” portion of his presentation, Mr. Kropiewnicki covered sale of stock (equity interests) vs assets in practice sales, tax allocation for the assets sold and for various categories of sellers (ie, corporations, LLCs, etc.), post-sale employment of the seller and critical terms for the seller’s post-sale service contract. The last item includes seller’s compensation, how much control the seller has over his or her duties, assignment of patients, other contract terms and termination.
One factor that it’s crucial not to overlook is performing due diligence; Mr. Kropiewnicki urged sellers to check the buyer’s references. “Run a lien and judgement search on the buyer.”
Once a sale is agreed to, guidance on the transition itself including use of the seller’s name and for how long, and custody and maintenance of medical records.
One essential thing to keep in mind when selling a practice, Mr. Kropiewnicki said, is to allow plenty of time for the process. It always takes longer than you think, he warns, and time pressures negatively affect price.
