Buying an outpatient clinic, lab or imaging center in Florida

These businesses provide tests, scans and procedures outside a hospital: imaging centers (x-ray, ultrasound, CT, MRI), clinical labs and patient draw sites, urgent care centers, ambulatory surgery centers, sleep labs, and infusion and wound care centers. Most are paid per test, scan or procedure by Medicare, Medicaid managed care plans, commercial insurers, workers' compensation and auto insurers, plus cash prices for uninsured patients.

Patients arrive in two ways. Imaging centers and labs depend on doctors who order tests, so their referral relationships are the business. Urgent care centers depend on walk-ins, which come down to location, hours and how quickly people are seen. Revenue repeats only as long as referrals and visits keep coming.

These businesses run on expensive equipment. An MRI or CT scanner, lab analyzers and their service contracts are large fixed costs, so profit depends on keeping the machines busy and on what each payer pays. The team usually includes a medical director, physicians or radiologists (often under contract to read scans), technologists, lab staff and phlebotomists (who draw blood), nurses or medical assistants, a front desk that handles insurance approvals, and billing staff.

• Many referring doctors, with no single practice sending most of the volume.
• Contracts with the major insurers in the area at stable rates.
• Equipment in good condition, under service contracts, and recent enough that insurers and referring doctors accept the images and results.
• Current accreditations, and stable agreements with the radiologists or medical director.
• Fast scheduling, quick results, and staff who handle insurance pre-approvals well. That is often what referring offices care about most.
• For urgent care: a visible location, good hours and short waits that bring patients back.
• A billing team that tracks denied claims and appeals them instead of writing them off.

A center that isn't wholly owned by licensed practitioners (true of many imaging and urgent care centers) generally needs a health care clinic license from AHCA, the Agency for Health Care Administration (part X of chapter 400). The clinic needs a medical director who accepts legal responsibility in writing, or a clinic director if it offers no physician services. That director may not refer patients to the clinic for MRI, CT, PET or x-rays (section 400.9935). Urgent care centers must post prices for uninsured patients. Ambulatory surgery centers are licensed separately (chapter 395). For a change of ownership, the seller must give written notice and the buyer must apply at least 60 days ahead.

Florida stopped licensing clinical labs in 2018, but labs still need a federal CLIA certificate, and a change of ownership must be reported within 30 days. X-ray and CT machines are registered with the Department of Health. If you buy the assets, you register the machines within 30 days and before using them; if you buy the company, you report the changes within 30 days. Medicare pays for the technical part of MRI, CT, nuclear medicine and PET scans (the scan itself, not the doctor's reading) only to accredited suppliers. Florida's Patient Self-Referral Act (section 456.053) restricts referrals for imaging, lab work or therapy to businesses the referring provider has invested in.

Ask for volume by referring doctor for the last two or three years. If a few practices send most of it, ask to meet them before closing. Find out whether any referring doctor owns part of the business or receives payments from it, such as rent, medical director fees or marketing deals. Have a health care attorney review each one, because federal and Florida referral laws apply.

Get the age, service history and remaining payments on every major machine, and price out replacing anything near the end of its life. Check whether equipment leases and service contracts can be assigned to you. Look at the mix of payers and recent rate changes, since Medicare and insurers revise their rates. If auto insurance claims are a large share, confirm the center has the license and accreditation that Florida's no-fault law requires for it to be paid. A licensed clinic that offers MRI must hold national accreditation, and AHCA will deny a change of ownership if the clinic is out of compliance (section 400.9935(7)), so get the accreditation file. Finally, plan the timing of licenses, enrollments and payer contracts so billing doesn't stop.

• Which doctors or practices send you the most patients, and how long have they worked with you?
• How old are your main machines, and what do the service contracts cover?
• Who reads your scans or directs the lab, and could that agreement easily continue under a new owner?
• Which insurers do you have contracts with, and have any cut rates or dropped you recently?
• How long does a patient wait for an appointment, and for results?
• Do any doctors who refer to you have an ownership stake or another financial arrangement with the business?
• Has the center had any audits, inspections or repayment requests from Medicare or insurers?