If you've been told a healthcare broker will "get paid by the buyer" or "won't cost you anything to list," that's only partially true — and the parts that are misleading are exactly where most sellers leave money on the table.
This post is a clear, honest breakdown of how medical practice and healthcare clinic brokers actually get paid in 2026. We'll cover sell-side commissions (when you're the seller), buy-side retainers (when you're the buyer), success fees, co-broker splits, and the structural incentive problems baked into traditional broker compensation.
If you're considering hiring a healthcare M&A broker — sell-side or buy-side — read this first.
The two main models: sell-side and buy-side
Healthcare M&A brokers work in two different modes:
Sell-side (representing the seller): You're a medical practice owner who wants to sell. You hire a broker to find buyers, run a competitive process, negotiate, and close.
Buy-side (representing the buyer): You're an acquirer (private equity, healthcare operator, family office) who wants to buy practices. You hire a broker to source targets, run outreach, and quarterback the acquisition process.
The fee structures are completely different.
Sell-side fees — how listing brokers get paid
The traditional sell-side model has three components:
1. Listing fee or retainer (usually $0)
Most sell-side healthcare brokers charge no upfront fee. They take the listing on a contingent basis and get paid only at close. This is the "you only pay if I sell" model.
Watch for: Some brokers charge "marketing retainers" of $5–25K up front. Sometimes legitimate (covering CIM preparation costs); sometimes a sign the broker isn't confident your practice will sell quickly.
2. Success fee (commission)
The big one. Standard healthcare M&A success fees by deal size:
- Under $1M EV: 10–12% (Main Street brokerage)
- $1M–$5M EV: 8–10%
- $5M–$10M EV: 6–8%
- $10M–$25M EV: 4–7% (sliding scale, e.g., Lehman formula)
- $25M–$100M EV: 1.5–4% (decreasing with size)
- $100M+ EV: 0.5–1.5% (investment bank territory)
For a $10M Article 28 sale, a typical sell-side commission is 6–8% — that's $600,000 to $800,000. A serious sum.
3. Co-broker splits
If a buyer's broker brings the buyer, the seller's broker shares a portion of the commission with them. Standard split is 50/50. So in a $10M deal with 7% commission ($700K), the listing broker keeps $350K and the buyer's broker gets $350K.
This is invisible to the seller — you pay the full 7%. But it matters because:
- A listing broker willing to co-broker has access to a much wider buyer pool
- A listing broker who refuses to co-broker is essentially limiting your buyer universe to their personal contacts
Always ask: "Will you co-broker with buyer-side brokers?" If the answer is no, ask why.
Buy-side fees — how buyer-side brokers get paid
Buy-side healthcare M&A is structured differently. The buyer pays the broker.
1. Engagement retainer
Typically $25K–$75K up front, non-refundable. Sometimes creditable against the success fee at close.
Why retainers exist on the buy side: sourcing targets and running cold outreach campaigns is real work that costs the broker time and money. The retainer ensures the broker is paid for the sourcing effort even if no deal closes.
2. Monthly work fee
Some buy-side engagements charge monthly work fees (typically $5K–$15K/month) starting after a few months of the engagement. This compensates the broker for ongoing sourcing while you wait for a deal. Like the retainer, monthly fees are typically creditable against the success fee.
3. Success fee at close
Standard buy-side success fees are smaller than sell-side because the buyer's broker is delivering deal flow, not running an auction:
- 2.5–3.5% on the first $5M of EV (sliding lower with size)
- 2.0–2.5% from $5M–$10M
- 1.5–2.0% from $10M–$25M
- 1.0–1.5% above $25M
- Typical minimum success fee: $200K–$500K (regardless of deal size)
For a $12M acquisition, a typical buy-side success fee is $200K–$300K.
The Lehman formula
Many healthcare M&A engagements use the "Lehman formula" or a "double Lehman" for success fees on larger deals:
- Lehman: 5% on first $1M, 4% on next, 3% on next, 2% on next, 1% on everything above $4M
- Double Lehman: 10% on first $1M, 8% on next, 6% on next, 4% on next, 2% on everything above $4M
Lehman formulas are common in the $5M–$50M range. They produce a sliding scale that ensures the broker gets meaningful compensation on smaller deals while not over-charging on larger ones.
The incentive problem nobody talks about
Here's the structural issue with sell-side broker compensation that smart sellers should understand:
Your broker has the same percentage commission whether your practice sells for $9M or $11M. The difference to your bank account is $2M. The difference to your broker is $140K (at 7%).
That $140K matters to your broker — but it matters less than just closing the deal. A broker with 20 active listings is making a small allocation decision: spend 50 hours pushing your buyer up from $9M to $11M, OR spend those 50 hours closing 3 other listings at acceptable prices. Most brokers, rationally, choose the latter.
This is why you should ask:
- "How many active listings do you have right now?" (More than 10 = you're a portfolio bet, not a focus)
- "What was the highest multiple you've negotiated for a similar practice?" (If they can't answer, they don't push)
- "What's your fee structure on a deal that goes 30% above asking?" (Some brokers offer escalator fees — extra commission above an asking price threshold. This aligns incentives)
A senior healthcare M&A broker should be willing to discuss escalator fees, performance bonuses for closing above a target price, and other structures that align their economics with yours.
Buy-side broker incentive problem
Buy-side brokers have a different structural issue: their success fee scales with deal size, but their preference is for ANY deal to close. A buy-side broker may push you to acquire a sub-optimal target if it's easier to close than a better target.
This is why you should ask your buy-side broker:
- "Do you ever advise clients to walk away from deals?" (If never, they're optimizing for closing, not for fit)
- "What's your decision framework for which targets to prioritize?" (Should be based on your criteria, not theirs)
- "What happens to your retainer if I find my own target without using your sourcing?" (Some engagements allow walk-away credit; others don't)
What we charge — and why
For full transparency, here's how Nexus Bridge Brokers structures fees for our healthcare engagements:
Sell-side healthcare practice listings:
- $0 upfront retainer
- Success fee: 8–10% sliding scale based on transaction size
- Always willing to co-broker (50/50 standard)
- Escalator fees available for premium-pricing scenarios
Buy-side healthcare acquisition mandates:
- $35,000 retainer at engagement (50% creditable against first success fee)
- $7,500/month work fee starting month 4 (100% creditable against first success fee)
- Success fee: 3.5/2.5/2.0/1.5% sliding scale, $250K minimum
- 12-month exclusivity + 12-month tail
- Co-broker friendly (we frequently work with sell-side advisors)
A typical buy-side mandate where we close a $12M deal generates approximately $290K in success fees — minus credits for the retainer and work fees already paid. The retainer + work fees plus the buy-side relationships we maintain make us a real partner for clients pursuing 2–3 acquisitions over 12–24 months, not just a single deal.
How to choose a healthcare M&A broker
Five questions every prospective client should ask:
- "What healthcare-specific transactions have you closed in the last 24 months?" If they can't name 3+, look elsewhere.
- "Who are your healthcare M&A counsel and QofE accountant relationships?" Real healthcare brokers have rolodexes of healthcare-specialist legal, accounting, and regulatory consultants. Generic brokers don't.
- "How do you handle PHHPC / OMH / DOH regulatory transitions?" A broker who looks confused at this question hasn't done many real healthcare deals.
- "What's your average time-to-close on a healthcare engagement?" 9–14 months is normal for Article 28; 6–10 months for Article 31. If they say "60–90 days," they don't know what they're doing.
- "Will you provide a list of past clients I can call as references?" Senior brokers have a deep reference list. Junior brokers don't.
The bottom line
Healthcare M&A is a specialty practice. Don't hire a generic business broker for an Article 28 D&TC sale or a buy-side healthcare mandate any more than you'd hire a generic family lawyer to negotiate a $10M corporate transaction.
A specialty healthcare-focused broker:
- Knows the regulatory mechanics
- Has the deal-team relationships
- Understands the multiple structures and how to push them
- Has the buyer or seller pool to run a competitive process
- Charges fees that pay for themselves several times over through better pricing and faster close
If you're contemplating selling a NY/NJ/CT medical practice or considering a buy-side acquisition mandate, we offer free 30-minute consultations to discuss fit and fee structure. No obligation. No follow-up if there's no fit.
Call 201-400-9827 or email steven@nexusbridgebrokers.com.
Steve Reese is the founder of Nexus Bridge Brokers, a tri-state business brokerage focused on healthcare and franchise route transactions in New York, New Jersey, and Connecticut. Direct: 201-400-9827 | steven@nexusbridgebrokers.com
This article is for general informational purposes only and does not constitute legal, tax, or investment advice. Fees and structures discussed are industry typical figures and may vary by transaction.
Steve Reese is the founder of Nexus Bridge Brokers, a tri-state business brokerage focused on healthcare and franchise route transactions in New York, New Jersey, and Connecticut. Direct: (201) 400-9827 | steven@nexusbridgebrokers.com
This article is for general information only and is not legal, tax, or investment advice. Any acquisition or sale of a regulated healthcare facility must be coordinated with qualified healthcare regulatory counsel.