Healthcare M&A Glossary

National accreditation body for ambulatory surgery centers, urgent care centers, and other outpatient facilities. AAAHC accreditation is one of the two primary accreditation pathways for ASCs (the other being Joint Commission). Clean accreditation history is a material factor in ASC valuation.

A specialty ambulatory surgery center focused on endoscopy procedures (colonoscopy, EGD, etc.), typically owned by GI practices. NJ AECs are licensed under NJ DOH as Class C or Class D ambulatory care facilities. AEC ownership is the single largest multiple driver for NJ GI practice sales.

Federal criminal statute (42 USC § 1320a-7b) prohibiting payments or inducements for federal healthcare program referrals. Applies to medical practice and ASC M&A transactions. Properly-structured deals use AKS safe harbors (investment interests, employee compensation, etc.) to ensure compliance.

Outpatient surgical facility licensed for same-day surgery. NJ ASCs operate under NJ Department of Health Class C / Class D ambulatory care facility licensure. NY ASCs operate under Article 28. ASCs typically command 6×–10× EBITDA. See Sell an ASC in NJ.

Section of NY Public Health Law that governs outpatient diagnostic and treatment centers (D&TCs), ambulatory surgery centers, dialysis facilities, and similar outpatient facilities. Any 10%+ ownership change requires PHHPC Certificate of Need (CON) approval. Typical CON timeline 6–12 months.

Section of NY Mental Hygiene Law governing outpatient mental health programs in NY. Implemented since 2023 as MHOTRS (Mental Health Outpatient Treatment and Rehabilitative Services). Ownership changes require NY Office of Mental Health (OMH) approval. Typical OMH approval timeline 4–9 months. See Sell a Behavioral Health Practice.

Section of NY Mental Hygiene Law governing substance use disorder (SUD) treatment programs in NY. Ownership changes require NY Office of Addiction Services and Supports (OASAS) approval. Typical OASAS approval timeline 4–9 months, similar to Article 31.

HIPAA-required agreement between a healthcare provider (Covered Entity) and a third party (Business Associate) that handles protected health information. Must be in place between a selling practice and any acquirer or service provider before PHI is shared during due diligence.

The multiple of EBITDA at which a healthcare practice or facility is acquired. Sometimes used interchangeably with "transaction multiple" or "deal multiple." For NJ healthcare M&A in 2026, buyout multiples range from 4× (urgent care single-site) to 10× (premium multi-specialty ASCs and dermatology with strong cosmetic mix).

A transaction structure where one component of a practice or facility is sold separately from the rest. Common example: selling the medical practice (PC) to a hospital system while retaining ownership of the medical office building (real estate) and leasing it back. Often used to optimize tax outcomes.

The formal marketing document prepared by the broker describing the practice or facility for sale. Includes business overview, financials, operational details, regulatory profile, and growth opportunities. Released to qualified buyers under NDA. CIM quality is a material factor in attracting premium PE buyers.

NY State approval required for ownership changes of Article 28 facilities. Reviewed by PHHPC. Evaluates: financial capability of the buyer, character/competence of the principals, community need, and quality-of-care implications. Typical timeline 6–12 months.

The legal doctrine that only licensed physicians may own a medical practice. Enforced in NJ, NY, and most US states. Drives the MSO/Friendly-PC structure used in PE-backed medical practice acquisitions. Non-compliance creates retroactive corporate practice exposure.

An outpatient facility licensed under NY Article 28. Common examples include freestanding ASCs, dialysis centers, imaging centers, and certain urgent care centers. Ownership change of D&TCs requires PHHPC CON approval.

DEA Schedule registration required for physicians who prescribe controlled substances. DEA registrations are personal to the physician and do not transfer with a practice sale; selling physician registrations are surrendered or maintained personally. New practice ownership establishes new DEA registrations.

PE-backed multi-state dental management platform. Functionally equivalent to MSO for dentistry. DSOs acquire dental practices using MSO/Friendly-PC mechanics adapted for dentistry. Major NJ-active DSOs include Heartland Dental, Smile Brands, Dental Care Alliance, Pacific Dental Services, and Mid-Atlantic Dental Partners. See Sell a Dental Practice in NJ.

The standard profitability measure used in healthcare M&A. EBITDA is multiplied by a market multiple to derive enterprise value. Normalized EBITDA — adjusted for owner add-backs, non-recurring items, and related-party transactions — is the actual figure buyers use.

NY Medicaid enrollment and claims processing system. Healthcare providers must re-enroll in eMedNY following an ownership change to continue billing NY Medicaid. Enrollment timeline typically 90–120 days.

The price that would be paid by a willing buyer to a willing seller in an arm's-length transaction. Critical concept in healthcare M&A because of Stark Law and AKS requirements — service-fee arrangements, real estate leases, and physician compensation in MSO structures must be at documented FMV.

The physician-owned professional corporation in a MSO/Friendly-PC structure. The Friendly-PC owns the clinical practice (maintaining CPOM compliance) while the MSO provides management services for a fee. Standard structure for PE acquisition of NJ/NY medical and dental practices.

The portion of practice value above the tangible asset value. Represents reputation, patient relationships, brand, and other intangibles. Personal goodwill (attributable to the selling physician personally) vs. enterprise goodwill (attributable to the practice as a going concern) is a critical tax distinction in healthcare M&A.

Federal law governing protected health information (PHI). Healthcare M&A transactions require detailed HIPAA compliance — BAAs with diligence parties, secure data rooms, de-identified data for early-stage sharing, and HIPAA-compliant transition of PHI to the acquirer.

A Stark Law safe harbor protecting properly-structured in-office services (imaging, lab, physical therapy, etc.) from self-referral restrictions. The exception requires services be furnished in the physician's same building, billed by the physician's practice, and meet specific FMV requirements.

Preliminary non-binding agreement outlining principal deal terms (price, structure, exclusivity, contingencies). Typically followed by 60–90 days of exclusive diligence and definitive agreement negotiation.

NY OMH's 2023 implementation framework for outpatient behavioral health programs under Article 31. MHOTRS licensure is the gating asset for premium PE acquisition of NY behavioral health practices.

The non-clinical entity in an MSO/Friendly-PC structure that provides administrative, IT, billing, real estate, and management services to a physician-owned PC for a fee. Allows non-physician investors (PE, family offices) to participate economically while CPOM is maintained.

Confidentiality agreement signed by potential buyers before receiving the CIM. In healthcare M&A, NDAs typically include specific HIPAA-related provisions and 18–36 month confidentiality terms.

NY state agency overseeing substance use disorder treatment programs. Owns approval authority for Article 32 SUD program ownership changes.

NY state agency overseeing outpatient mental health programs. Owns approval authority for Article 31 / MHOTRS program ownership changes. Typical approval timeline 4–9 months.

NY state body overseeing physician character and professional conduct. Material in healthcare M&A when buyer physicians need NY medical license verification and character reviews.

The legal entity structure typically used for physician-owned medical practices in NJ and NY. The PC is owned by licensed physicians (maintaining CPOM compliance). In MSO/Friendly-PC structures, the PC remains physician-owned while the MSO is owned by PE or other investors.

CMS provider enrollment system for Medicare. Healthcare providers must re-enroll in PECOS following an ownership change to continue billing Medicare. Re-enrollment timeline 60–120 days.

The NY State Department of Health body that reviews and approves Article 28 facility ownership changes through the Certificate of Need (CON) process.

Patient health information protected under HIPAA. Healthcare M&A transactions require careful PHI handling during diligence — typically de-identified data shared in early stages, with full PHI exchange under BAA only after specific buyer qualification.

Independent CPA-prepared analysis validating normalized profitability of a business for M&A purposes. Typical cost $15K-$50K for healthcare practices. Sell-side QoE typically returns 10-30x its cost in held sale price. See Quality of Earnings Guide.

Equity in the buying PE platform that the selling physician takes as part of consideration, rather than cash. Typically 20–30% of total consideration in PE healthcare M&A. Participates in the platform's eventual exit (typically 4–7 years later), creating upside above cash-at-close.

A profitability measure used for smaller healthcare practice sales (typically under $1M SDE). Calculated as EBITDA + owner compensation + owner perks. Used as base for SDE multiples on solo practices. For larger practices, EBITDA is the more common measure.

Federal Physician Self-Referral Law (42 USC § 1395nn). Restricts physicians from referring Medicare/Medicaid patients for designated health services to entities with which they have financial relationships. Specific safe harbors (in-office ancillary services exception, FMV employment, etc.) protect properly-structured arrangements. Critical for any practice sale involving in-office ancillaries or ASC ownership.

A contractual provision in broker engagement letters: if a buyer who was introduced by the original broker eventually buys the business within a defined period (typically 12–24 months) after the engagement ends, the original broker still earns their commission. See How to Switch Business Brokers in NJ for tail period mechanics.

The "normalized working capital target" the buyer would expect to inherit at close. Established in the LOI and definitive agreement. Differences between actual working capital at close vs. the peg result in price true-up adjustments. Critical economic term often under-negotiated by sellers.