A. Organization of the Practice

(1) Documents showing the legal entity or structure of the practice such as articles of incorporation or articles of organization.

(2) Certificates of good standing or existence from the state corporation commission

(3) Current bylaws

(4) Copy of minutes for meetings of practice’s (a) governing board; (b) shareholders; and (c) executive and other committees for the past ____ years . List all standing and other committees of practice (including members and duties).

(5) List of all jurisdictions in which practice is qualified to do business and list of all other jurisdictions in which practice owns or leases real property or maintains an office or an agent who is a resident of such state and a description of the business conducted in each such jurisdiction. Copy of the certificates of authority, good standing certificates and tax status certificates from all jurisdictions in which practice is qualified to do business.

(6) List of all “doing business as” names under which practice operates.

(7) Copy of all documents related to joint venture arrangements or partnerships to which practice is a party, and related correspondence.

(8) Federal employer identification numbers of practice.

(9) List of all state agencies required to approve a sale of assets by practice.

B. Ownership and Control of Practice

(1) Organizational chart.

(2) List of shareholders, indicating type of security and percentage interest owned, of practice and copy of any operating agreements, voting agreements or other agreements regarding ownership or control of practice.

(3) List of all subsidiaries of practice and the percent of ownership interest owned. If the percentage owned is less than 100%, provide detailed information about other owner and its/their interest.

(4) Description of equity securities of practice, if any.

(5) Members of the board of directors of practice.

(6) Copy of practice’s conflict of interest policy and all statements submitted pursuant thereto.

(7) List of all consultants and legal counsel used in the last ____ years.

(8) Description of any restrictions or policies on transfer of assets (including but not limited to, restrictions pertaining to religious affiliation, restricted gifts, endowments, required authorizations and approvals).

C. Financial Matters

(1) Audited and unaudited financial statements prepared according to GAAP for the last ____ years and for the year-to-date along with the same month-end in the prior year.

(2) Copy of all monthly internally prepared detail income statements, P&Ls, and balance sheets, including the most recent year to date financial and operating statements.

(3) Any auditors (internal and external) letters (including inquiry letters) and reports to management for the past five fiscal years (and management’s responses thereto).

(4) Receivables analysis and bad debt experience for the past ____ years.

(5) List of all contingent liabilities, identifying such liabilities and the nature of the contingency.

(6) Any projections for the current and following years, with a description of assumptions to and the bases underlying the projections.

(7) Committed and planned capital expenditures and expense budget for the next ____ fiscal years.

(8) Description of practice’s depreciation policy.

(9) List terms of gifts and endowments, and all pending gifts and bequests.

(10) Copy of outstanding bond documents.

(11) Copy of all debt instruments, including all guaranty agreements of practice.

(12) Description short and long-term financing plans of practice.

(13) Description of principal banking and credit relationships (including payroll matters), the names of each bank, or other financial institution, the nature, limit and current status of any outstanding indebtedness, loan or credit commitment and other financing arrangement.

(14) Copy of correspondence with lenders for the past ___ years including all compliance reports submitted by practice or its independent public accountants.

(15) Copy of any UCC searches or filings related to practice in relevant states.

D. Assets and Operations

(1) List of fixed assets, by site, owned or used by the practice, including the identification of the person or entity holding title to such assets.

(2) Copy of any current furniture and equipment leases or appraisals.

(3) Schedule of each parcel of land and buildings owned, including location, description, lot size, building square footage, date of purchase, and purchase price; provide a copy of the deed and title report on each parcel; copy of all previously prepared environmental engineering surveys and inspections on such parcels. Copies of any real estate appraisals on such parcels. Original deeds and/or bills of sale for such real property.

(4) Copy of any outstanding loans related to the facilities or lease-hold improvements.

(5) List of all ancillary equipment and vehicles utilized in practice.

(6) Schedule of collateral currently pledged.

(7) Schedule of all intangible assets (including customer lists).

(8) History of the practice.

(9) Description of all major services offered, along with a description of any major service expansions planned or anticipated.

E. Reimbursement Matters

(1) Statistical information concerning the operation of the practice, including without limitation: FTEs by department by month, trend report related to patient volumes, patient visit total by provider, new pt visit total by provider, unit volumes by CPT code by provider (for ___ years), surgical case volume by provider, revenue collection by doctor and by facility, revenue and collection rate by payor, payor mix including number of enrollees for any capitated plan, work RVU’s, compiled annually for the last three years and monthly for the calendar year to date.

(2) Summary matrix of managed care rates and terms and associated managed care gross charges by managed care payor for the two most recently completed fiscal years as well as the most recently completed month-end in the current year and the same month-end in the prior year.

(3) Copy of contractual computations for the two most recently completed fiscal years as well as the most recently completed month-end in the current year and the same month-end in the prior year. Include a schedule which ties-out the contractual computations to the general ledger(s) and financial statements.

(4) Copy of general ledgers for the two most recently completed fiscal years as well as the most recently completed month-end in the current year and the same month-end in the prior year.

(5) Net revenue by payee source for past ___ years.

(6) Copy of accounts receivable aging report by payor for the ___ most recently completed fiscal years as well as the most recently completed month-end in the current year and the same month-end in the prior year.

(7) Copy of all correspondence within the last ___ years received from or directed to (a) Medicare, Medicaid, or any other third-party payor, (b) any governmental agency, or (c) any accrediting organization.

(8) Copy of all contracts, lease agreements, provider agreements, and other binding legal contracts concerning third-party reimbursement consulting services.

(9) Copy of marketing materials and other communications with referral sources or patients.

F. Significant Contracts and Commitments

(1) Copies of all real property leases, subleases.

(2) Contracts, understandings or arrangements concerning maintenance of premises.

(3) Contracts and correspondence relating to any completed (during the past ___ years) or proposed reorganization, acquisition, merger, or purchase or sale of substantial assets.

(4) All material agreements encumbering personal property owned by practice including pledge, security agreements, or financing statements.

(5) Copy of all leases of personal property, equipment, and fixtures.

(6) Copy of all loan agreements, notes, guarantees, compensating balance arrangements, lines of credit, lease financing arrangements, installment purchases.

(7) Current contracts with consultants.

(8) Current contracts for the purchase of fixed assets.

(9) Data processing agreements, including maintenance and communication contracts.

(10) Documents relating to any loans or other transactions between Practice and any director, trustee, officer or owner of the practice.

(11) Contracts between practice and other health care providers, including, but not limited to, any contracts for any entity to manage units or departments of the practice or contracts for the practice to provide services to other entities.

(12) For any contract listed in this section, state whether any party is in default or claimed to be in default.

(13) For any contract listed in this section, state whether the contract requires the consent of any person to assign such contract to the buyer or collaterally assign such contract to any lender of the buyer.

(14) Contracts and other documents regarding arrangements with referral sources, marketing agents, patients and third-party payors.

(15) Copy of honorarium and consulting agreements for any of the providers and indicate whether income flows to the practice.

(16) Copy of all arrangements where physicians are providing medical training.

(17) Copy of all clinical trial arrangements and indicate whether it is with the practice or with the physicians individually.

(18) List of all outside activities where physicians or mid-level providers are providing medical services, on a volunteer basis or where they are compensated from a source other than the practice.

(19) List of all major contracts or understandings not otherwise previously disclosed under this section, indicating the material terms (including assignment and termination provisions) and parties.

G. Insurance

(1) Copy of all insurance and indemnity policies and coverage carried by practice, including policies or coverage for professional liability, properties, business risk, casualty and workers compensation for both current and previous year. Attach name, address, and telephone number of the insurance broker.

(2) Copy of most recent renewal proposal and renewal data submitted for last renewal.

(3) Summaries of property — casualty insurance programs for the past ___ years.

(4) List currently valued claim information for all lines of insurance for the past ____ years. Include summaries of major claims, full descriptions of any casualty claims open for more than five years, and description of who provides necessary reserving practices services and calculations for incurred but not reported.

(5) Description of risk management activities for the operation of the practice (including incident reporting policies), along with loss control/prevention and safety programs.

(6) Summary and description of all product, property, business risk, employee health, group life, and key-man insurance relating to the operation of the practice.

H. Governmental Regulation

(1) Copy of all licenses, permits, certificates, authorizations, registrations, concessions, approvals, exemptions and other operating authorities from all federal, state and local regulatory authorities (including, but not limited to, business licenses, laboratory, pharmacy, nuclear, food service, incinerator, sprinklers, sterilization equipment, air permits, elevators, boilers, tanks, and any other permits or licenses) and any applications therefore, and a description of any pending, contemplated or threatened changes in the foregoing, and a description of any pending or threatened proceedings or investigations before any court or any regulatory authority regarding the foregoing.

(2) Description of the potential affect on practice’s operations or assets of any pending or proposed federal or state regulations or regulatory changes of which practice is aware.

(3) Copy of any consent decrees or orders (including applicable injunctions) to which practice is a party.

(4) Copy of all correspondence with regulatory authorities, including CMS, state agencies, and Medicare intermediaries for the past ____ years.

(5) List and describe each pending or threatened claim or investigation by any governmental agency which might have an effect on practice’s operations or assets, including copy of correspondence if applicable.

(6) Copy of all certificates of need and related documentation.

(7) Copy of all other data on regulatory compliance including environmental control and employee safety compliance, problems, potential violations, expenditures, etc.

(8) Copy of the most current state DEA license (and equivalent state license, if applicable)

(9) HIPAA privacy and security policies and notice of privacy practices, and summaries of events of noncompliance for the past ____ years.

(10) Copy of all OSHA examinations, reports, and complaints.

I. Litigation

(1) List of all litigation, arbitration and government proceedings relating to practice that might have an effect on practice’s operations or assets to which practice or any of its directors, trustees, owners, officers or employees is or has been a party, or which is threatened against any of them, indicating the name of the court, agency or other body before whom pending, date instituted, amount involved and current status.

(2) List and give a brief description of any pending or threatened claim or litigation involving alleged violations of laws or regulations regarding equal employment opportunity or the health or safety of employees or others or other governmental or administrative proceedings which might have an effect on practice’s operations or assets.

(3) Brief description of any outstanding judgments against practice.

(4) Information as to any past or present federal, state, local or foreign governmental investigation of or proceeding involving practice, or the practice’s directors, trustees, owners, officers or employees.

(5) Copy of all attorneys’ responses to audit inquiries for the past ____ years.

(6) ____ year claims history for professional/general liability, workers’ compensation, auto, health and dental, property, and officers and directors’ insurance.

(7) Copy of all pending and incomplete settlements and a copy of any executed agreements within the past ____ years.

J. Billing and Utilization Review [Coding review and analysis should be considered]

(1) Copy of billing and collection policies and procedures.

(2) List of all discounts given regularly by the practice and copy of discount and charity care policies and procedures.

(3) Copy of billing and refund policies and procedures.

(4) Copy of current charge master by location.

K. Management, Employees, Benefits and Contracts

(1) Copy of practice’s employee benefit plans as currently in effect, including all pension (defined benefit, money-purchase and target benefit), profit sharing, thrift, stock bonus, ESOPs, bonus, stock option plans, group or key man life insurance plans, salary continuation plans, supplemental unemployment benefit plans, medical insurance or reimbursement plans and all other direct or deferred compensation plans, together with the following documents:

·        All applicable trust agreements for the foregoing plans;

·        Copy of all IRS determination letters for the foregoing qualified plans;

·        Latest IRS forms for the foregoing qualified plans, including all annual reports, schedules and attachments;

·        Latest copy of all summary plan qualifications, including modifications, along with any booklets for the foregoing plans;

·        Latest actuarial evaluations with respect to the foregoing defined benefit plans;

·        Expense history related to these plans, including projected benefits obligation; and

·        Schedule of fund assets and unfunded liabilities under applicable plans.

(2) A current list of provider and non-provider FTE’s (by site, by department/service/job function) in connection with the practice’s operations, whether pursuant to a written agreement, full or part time, union or non-union. For each employee indicate date of hire, job title, current compensation rate, other fringe benefits, and indicate if hired pursuant to a written agreement or letter of employment.

(3) Copy of all employment contracts, consulting agreements, independent contractor agreements, incentive agreements, non-disclosure agreements, and non-compete agreements relating to any employees, including officers and executive management personnel, of practice who work at the practice or standard forms of such contracts. Disclose any compensation commitments not currently fulfilled. Separately indicate all key employees.

(4) Description of the employment background of the executive officers and directors of practice who work at the practice, including directorships of other companies.

(5) Copy of personal clinic schedule by physician for the last ____ months and a listing of regular weekly hours [by location].

(6) Projected payroll for the practice, [broken out by site] for the coming year.

(7) Copy of all agreements and description of all arrangements with directors in connection with the practice’s operations, including compensation for board, committee duties, and directorships.

(8) Copy of any collective bargaining agreements which might affect the operations of the practice (if any). Description of labor disputes relating to the practice’s operations within the last three years. List of current union representation, organizational efforts and projected schedule of future collective bargaining negotiations (if any).

(9) Copy of all employee handbooks and policy manuals (including affirmative action plans) for employees.

(10) Copy of all personnel policies and procedures for employees, including but not limited to, payroll procedures/cycles, harassment, discrimination, etc.

(11) Copy of HR agreements for claims administration and stop-loss reimbursement for employees.

(12) Description of staffing plans for expansion of the practice’s staff.

L. Tax Matters

(1) Copy of tax returns (including information returns) for the latest closed year and all open years for practice (including all federal and state consolidated returns) and a copy of each physician’s W2 form for last ___ years.

(2) Audit and revenue agent’s reports for practice; protests filed by practice.

(3) Settlement documents and correspondence for ___ years involving practice.

(4) Any agreements waiving statute of limitations or extending time involving practice.

(5) Description of accrued federal, state and local withholding taxes and FICA for practice.

(6) List of all state, local and foreign jurisdictions in which practice pays or files taxes or collects sales taxes from its customers.

(7) IRS Determination letters, private letter rulings, and documents as to federal, state, or real estate tax status.

(8) Copy of all IRS powers of attorney given by practice.

(9) List of all independent contractors of practice for which no withholding is taken.

(10) Copy of current letters concerning real estate tax exemption for practice’s properties.

(11) Copy of any loans, leases or other transactions with individuals at rates below market.

M. Environmental Matters in Respect of Practice’s Assets

(1) Name and address of local utilities (electric, gas, water/sewer, solid waste, etc.)

(2) Name and address of medical waste disposal companies and copy of recent manifest.

(3) Name and address of nuclear medicine handling company, x-ray maintenance, and other ancillary equipment companies.

(4) Copy of previous environmental surveys conducted at the practice including Phase I inspections, subsurface investigations, asbestos surveys, audits, etc.

(5) Copy of abatement plans for asbestos materials and/or lead paint.

(6) Copy of remediation reports for hazardous substance or petroleum spills.

(7) Operations and maintenance plan for asbestos building materials and/or lead paint.

(8) Copy of site safety plan including fire evacuation plan.

(9) Description of other environmental risk exposures, including EPA issues, occupational disease, poisonous substances, dust/airborne substances, mold, aquifer contamination, dump sites. Provide any related reports, and indicate who has evaluated the risk for practice.

N. Physician Relationships

(1) Copy of all recruitment, employment, non-compete, severance or other contracts with physicians who practice at the practice.

(2) Copy of loan guarantees with physicians.

(3) Instances where any physician serves as a landlord (individually or as part of an entity) to practice.

O. Accreditation

(1) Joint Commission status of the practice and copy of the three most recent Joint Commission survey reports and related correspondence and follow up.

(2) All other accreditation certificates, survey reports, and correspondence current or pending. Indicate if accreditation by an organization has been denied within the last ___ years.

P. Miscellaneous

(1) Copy of all press releases, press clippings, public relations materials or similar documentation issued in the last ____ years.

(2) Written brochures describing products or services.

(3) Website address.

(4) All annual reports for practice; all materials provided to owners, trustees and board members.

(5) Current descriptions of practice’s business, products, properties or operations that may have been prepared for any purpose, including any brochures used in soliciting or advertising.

(6) Copy of compliance plans, policies and documents relating to complaints, inquiries and internal investigations relating to possible regulatory compliance issues.

(7) Policies and procedures regarding informed consent advance directives, supervision, and medical records confidentiality in respect of the practice’s operations.