What is the PHHPC CON process for selling an Article 28 D&TC?

Any change in 10%+ ownership of an Article 28 facility requires NY DOH approval through the Public Health and Health Planning Council (PHHPC). The buyer files a CON application detailing the proposed ownership structure, financial capacity, character and competence of the new principals, continuity of services, and community need analysis. PHHPC reviews typically run 6–12 months — sometimes longer for complex transactions or those requiring full PHHPC committee review versus administrative approval. The CON process is the single biggest timing variable in an Article 28 sale, and is the reason most Article 28 transactions use a two-step close structure (initial close on management entity and real estate; deferred close on the license-holder entity contingent on PHHPC approval).

How long does an Article 28 D&TC sale take?

From engagement letter to funded close, Article 28 D&TC transactions typically take 12–18 months. The CON process through PHHPC is the dominant timing variable — administrative approvals run 6–9 months, full PHHPC committee approvals 9–14 months. Deals using a two-step close (initial close on management/real estate, deferred close on license entity post-CON) can deliver economic close to the buyer in 4–6 months while the regulatory close completes in parallel. ASCs, dialysis, and OTP add complexity due to overlapping CMS Medicare conditions of participation, state Medicaid managed care plan transitions (Healthfirst, MetroPlus, Fidelis, Affinity, EmblemHealth, EmpireBlueCross), and DEA Schedule II registration transitions for OTPs.

What is the Medicaid Managed Care impact on an Article 28 sale?

Article 28 D&TCs typically have significant Medicaid Managed Care revenue (Healthfirst, MetroPlus, Fidelis, Affinity, EmblemHealth Enhanced Care, Empire BlueCross HealthPlus, MVP, Molina, UnitedHealthcare Community Plan). Each MMC plan requires its own credentialing transition on ownership change — typically 60–180 days per plan. Plans often have anti-assignment provisions; buyers should expect to maintain a 'plan continuity' workstream from LOI through 90 days post-close, with escrow holdback for credentialing gap revenue. Specialty Article 28 categories (dialysis, OTP, FQHC) also have payer-specific federal program transitions (340B drug pricing for FQHCs, Medicare ESRD bundled payment for dialysis, SAMHSA OTP certification).

Does Stark Law and Anti-Kickback Statute apply to Article 28 D&TC sales?

Yes. Article 28 D&TCs are healthcare facilities subject to Stark Law (if they bill Medicare for designated health services like imaging, PT, clinical lab) and the Anti-Kickback Statute. Pre-sale Stark/AKS pre-screen is mandatory — focus areas include physician compensation models, medical director arrangements, referring physician investment, lease arrangements with referring physicians (per-click leases are a common AKS exposure), and joint-venture structures. PE buyers diligence this aggressively because Stark is strict-liability and the False Claims Act exposure is substantial. We coordinate with NY healthcare regulatory counsel (Manatt, Garfunkel Wild, Epstein Becker Green, Greenberg Traurig) to pre-screen these issues before going to market.

Does Nexus Bridge charge upfront fees for Article 28 D&TC sales?

No. Success-only commission. You pay nothing until your D&TC sells. Standard sliding scale: 10% on first $1M, 8% on $1M–$5M, 6% on $5M–$10M, Lehman-formula scaling above $10M. CON preparation, NY healthcare M&A counsel coordination, sell-side QoE coordination, and Medicaid Managed Care transition planning are included as part of the engagement at no additional cost. Article 28 transactions typically warrant the Lehman-formula tier given the deal sizes ($3M–$50M typical range).

Home · Healthcare M&A · Sell an Article 28 Clinic in NY

NY Article 28 D&TC M&A · Active Buyer Mandates

Sell an Article 28 Clinic in NY

Q: What is an Article 28 clinic and why does it sell at a premium?

Article 28 of NY Public Health Law governs Diagnostic and Treatment Centers (D&TCs) — freestanding outpatient facilities licensed by the NY Department of Health to provide ambulatory medical services. Article 28 D&TCs include primary care clinics, diagnostic imaging centers, ambulatory surgery centers (ASCs), dialysis centers, methadone/OTP (opioid treatment programs), and FQHC-style federally qualified health center look-alikes. They sell at a premium (typically 6×–11× EBITDA) because the Article 28 license itself is a scarce asset — new licenses require a Certificate of Need (CON) process through the Public Health and Health Planning Council that takes 12–18 months and is not guaranteed. Buyers pay for the license-protected revenue stream and the regulatory moat.

Q: What multiples do Article 28 D&TCs sell for in 2026?

2026 Article 28 D&TC multiples by sub-type: Primary care D&TC at 5×–8× EBITDA. Diagnostic imaging at 6×–10×, with multi-modality (MRI + CT + ultrasound) at the upper end. Ambulatory surgery centers (ASCs) at 7×–11× — among the highest healthcare multiples in NY. Dialysis at 7×–10× (limited buyer universe — DaVita, Fresenius, U.S. Renal Care). OTP/methadone clinics at 5×–9× (BayMark Health, Acadia Healthcare, Pinnacle Treatment Centers active). FQHC look-alikes at 4×–7× (mission-driven buyer universe, lower multiples). The license itself contributes a measurable premium: a comparable office-based primary care practice typically trades at 4×–6× EBITDA, while the same revenue inside an Article 28 D&TC trades at 5×–8× — the license premium is real and durable.

Q: Who are the active PE buyers for Article 28 D&TCs in 2026?

Active buyer categories: (1) PE-backed multi-specialty MSO platforms (Optum/UnitedHealth Group, VillageMD, agilon health, Privia Health for primary care D&TCs); (2) PE imaging consolidators (RadNet, Akumin, US Radiology Specialists, SimonMed for diagnostic imaging D&TCs); (3) PE ASC platforms (USPI/Tenet, Surgical Care Affiliates, Surgery Partners, AmSurg, Atlas Healthcare Partners for ASCs); (4) Strategic health systems (Mount Sinai, NYU Langone, Northwell, Montefiore actively acquiring D&TCs into their ambulatory networks); (5) PE methadone/OTP consolidators (BayMark, Acadia, Pinnacle); (6) FQHC and federally qualified health center expansions (look-alike status often the acquirer). Nexus Bridge currently has multiple active buy-side mandates across primary care, imaging, and ASC D&TC sub-types — contact us for current specifications.

Nexus Bridge represents NY Article 28 Diagnostic & Treatment Center owners across the five boroughs, Long Island, Westchester, and the Hudson Valley. We currently have multiple active PE and strategic buy-side mandates across primary care, diagnostic imaging, ASC, and OTP D&TC sub-types. The Article 28 license is the most valuable healthcare asset in NY because new licenses require a 12–18 month PHHPC CON process — buyers pay a license premium for what already exists. $0 upfront. Success-only commission.

Talk to a Buyer → (201) 400-9827

2026 Article 28 market signal: The Article 28 license is a scarce, durable asset. New licenses require a Certificate of Need application through the NY Public Health and Health Planning Council (PHHPC) that takes 12–18 months and is not guaranteed. Existing license-holders sit on a regulatory moat that PE platforms pay a measurable premium for — typically 1.0×–2.0× EBITDA above the comparable office-based practice multiple.

2026 Article 28 valuation multiples by sub-type

Article 28 covers a wide range of outpatient facility types — each with its own buyer universe and multiple range. The single largest multiple driver after sub-type is payer mix: commercial-heavy D&TCs trade at the high end of each range; Medicaid Managed Care–heavy D&TCs trade lower but with predictable, license-protected revenue that PE pays for differently.

D&TC Sub-type	EBITDA Multiple	Active Buyer Notes
Primary care D&TC (multi-site)	5×–8×	VillageMD, agilon, Privia, Optum value-based care platforms; Mount Sinai / Northwell strategic interest
Diagnostic imaging (multi-modality)	7×–10×	RadNet, Akumin, US Radiology Specialists, SimonMed actively rolling up tri-state imaging
Diagnostic imaging (single modality)	5×–7×	Lower multiple; single-MRI or single-CT centers lack scale leverage
Ambulatory surgery center (ASC)	7×–11×	USPI/Tenet, SCA, Surgery Partners, AmSurg, Atlas Healthcare Partners; highest healthcare multiple in NY
Dialysis center	7×–10×	DaVita, Fresenius, U.S. Renal Care — consolidated buyer universe of 3
OTP / methadone clinic	5×–9×	BayMark Health, Acadia Healthcare, Pinnacle Treatment Centers, Behavioral Health Group
FQHC look-alike	4×–7×	FQHC and look-alike consolidators; 340B drug pricing value transfer in deal
Article 28 + Article 31 combined site	6×–10×	Premium for integrated primary-care + behavioral-health Collaborative Care model
Hospital-extension D&TC	varies	Sponsoring hospital typically has right of first refusal; transactions often hospital-system to hospital-system

Multiples assume normalized trailing-12 EBITDA, clean Stark/AKS structure, no material payer concentration, lease >5 years remaining, and a clean PHHPC ownership history. License-quality premium typically 1.0×–2.0× EBITDA above a comparable office-based practice; deduct 0.5×–1.5× for Stark/AKS exposure, single-payer concentration >40%, or short lease.

The PHHPC CON process — the dominant timing variable

Every Article 28 D&TC sale runs through the Public Health and Health Planning Council. Any change in 10%+ ownership requires PHHPC review — there is no asset-only workaround that avoids it for a license-holder transfer. The CON process is what makes Article 28 deals slower than office-based practice deals, but it is also what makes the license valuable: the same regulatory friction that delays your sale is what protects your buyer's revenue stream post-close.

What PHHPC reviews

Character and competence of the new principals — criminal history, regulatory history, prior healthcare ownership, professional licensure of clinical leadership.
Financial capacity — pro-forma financials demonstrating ability to operate the facility; capital sources documented; equity vs. debt mix.
Continuity of services — same services, same hours, same payer participation, same geographic catchment.
Public need / community benefit — usually a low bar for continuation deals (vs. de novo CONs which face full need analysis).
Quality and management — medical director, governing body structure, quality assurance programs.

Administrative vs. full PHHPC committee review

Simpler transactions — same management team, same services, single new owner with healthcare track record — can qualify for administrative approval that runs 4–8 months. Complex deals — PE syndicate structures, multiple new principals, service-line additions, geographic relocations — trigger full PHHPC committee review which adds 3–6 months. Knowing in advance which path your deal will take materially changes the sale timeline and the LOI structure.

Two-step close structure

Because PHHPC takes 6–14 months, almost every Article 28 deal uses a two-step close:

Initial close (month 4–6 from LOI): Buyer closes on the management services entity (MSO), real estate (or sale-leaseback to REIT), non-clinical staff, equipment, and a management services agreement with the license-holder. Most of the purchase price flows at this close. Buyer takes economic control of the non-clinical operation.
Deferred close (month 10–16 from LOI): Upon PHHPC CON approval, buyer closes on the license-holder entity (typically a PC owned by NY-licensed physicians). Remaining purchase price flows. The license transfer is now legally complete.

The two-step close is the standard NY Article 28 deal structure. Negotiating who bears the regulatory risk during the gap period — what happens if PHHPC denies, what happens if PHHPC extends, what triggers seller buy-back — is where experienced healthcare M&A representation matters most.

Active PE and strategic buyers for NY Article 28 D&TCs

The Article 28 buyer universe is segmented by sub-type. We have current active buy-side mandates across several of these categories — if you own an Article 28 facility in any of these segments and are considering a sale in the next 6–36 months, the buyer demand is there now.

Primary care D&TC consolidators

Optum / UnitedHealth Group — aggressive primary care acquirer nationally, NY presence through CareMount and ProHEALTH. Targets large multi-site D&TCs.
VillageMD — backed by Walgreens, primary care + value-based care focus. Selective NY footprint.
agilon health — senior-focused primary care partnership model; risk-bearing.
Privia Health — physician-led MSO platform expanding in NY/NJ metro.
Strategic health systems — Mount Sinai, NYU Langone, Northwell, Montefiore, Hackensack Meridian (cross-river) actively acquiring D&TCs into ambulatory networks.

Diagnostic imaging D&TCs

RadNet (NYSE: RDNT) — largest U.S. outpatient imaging operator; active NY/NJ acquirer.
Akumin — restructured 2024 under Stonepeak ownership; selectively acquiring.
US Radiology Specialists — PE-backed (Welsh Carson); aggressive tri-state roll-up posture.
SimonMed Imaging — PE-backed; growing East Coast footprint.
Lenox Hill Radiology / RadNet — New York City imaging consolidation continues.
Imaging D&TC multiples among the highest in healthcare due to durable Medicaid Managed Care contracts and capex barriers (MRI > $1.5M, CT > $1M).

Ambulatory surgery centers (ASCs)

USPI / Tenet Healthcare — largest U.S. ASC operator (430+ ASCs).
Surgical Care Affiliates / Optum — UnitedHealth subsidiary, 200+ ASCs.
Surgery Partners — PE-backed (Bain), 180+ ASCs.
AmSurg / Envision — PE-backed.
Atlas Healthcare Partners — emerging mid-market ASC consolidator.
Hospital system JVs — Mount Sinai, NYU Langone, Northwell all run ASC JV programs that buy minority or controlling stakes from physician owners.
ASCs trade at the highest healthcare multiples in NY (7×–11× EBITDA) due to procedural revenue scale and CMS site-of-service migration tailwind.

Active Nexus Bridge buy-side mandates as of 2026-05-20: We currently represent buyers actively seeking Article 28 D&TCs in several sub-types across the NY metro area. Mandates updated monthly. If you own an Article 28 facility, we can tell you within 48 hours whether your specific profile matches an active mandate or whether we go to broader market.

Key value drivers for Article 28 D&TC valuation

License sub-type and CON history. Clean PHHPC compliance history, no operational deficiencies, no consent orders. A D&TC with prior PHHPC corrective action takes a meaningful discount.
Payer mix. Commercial + Medicare lifts multiple. Medicaid Managed Care is durable but lower-margin; pure Medicaid FFS lowers multiple. 340B participation for FQHC look-alikes adds value via the drug pricing margin.
Site density and catchment. Multi-site D&TCs in the same borough with shared back-office trade at platform multiples; single-site D&TCs trade at single-site multiples.
Physician ownership and continuity. PHHPC reviews physician owner credentials. Continuity commitments from existing medical director and key physicians materially shape buyer confidence.
Lease structure. Long-term lease (10+ years remaining or owned real estate) with below-market rent is a value driver. Short or month-to-month leases are PHHPC red flags.
EHR / PM systems. Modern cloud EHR (Epic via community connect, athenahealth, eClinicalWorks, Allscripts/Veradigm, NextGen) is expected. Legacy systems force costly conversion.
Compliance program maturity. Written OIG-aligned compliance program, designated compliance officer, periodic audits, HIPAA risk assessments — PE diligence checklists weight these heavily.
Quality metrics. HEDIS scores (for primary care D&TCs), MIPS performance, dialysis QIP star ratings, ASC accreditation (AAAHC, TJC, AAAASF) — all factor into PE valuation models.
Stark/AKS exposure. Per-click office leases with referring physicians, undocumented medical-director arrangements, lab kickbacks, and IDTF (independent diagnostic testing facility) imaging arrangements are the most common exposures — aggressive PE diligence here.
Medicaid Managed Care credentialing portfolio. Active participation in Healthfirst, MetroPlus, Fidelis, EmblemHealth Enhanced Care, MVP, Empire BCBS HealthPlus, Affinity. Number of MMC plans correlates with deal value — each plan is a credentialing transition workstream.
Real estate considerations. If owner owns the building: separate valuation typically 6.5–7.5% cap rate, sale-leaseback to healthcare REIT (MPT, Healthcare Trust of America, Sila Realty Trust) standard. If leased: lease assignability review pre-LOI.

2026 deal structure norms for Article 28 transactions

Deal Component	2026 Norm
Total purchase price split	60–75% cash at initial close (MSO + RE); 15–25% deferred at PHHPC close; 10–25% rollover equity or earnout
Rollover equity	10–30% (PE platforms prefer; strategic acquirers vary). Rolled equity participates in platform secondary exit 4–6 years later.
Earnouts	0–25%; typically tied to 2–3 year EBITDA targets or specific MMC plan retention milestones
Selling physician post-close commitment	2–5 year employment agreements (medical director role typical); 3–5 years if <55 years old
Real estate	Sale-leaseback to healthcare REIT (MPT, HTA, Sila) typical; 10–15 year triple-net lease at fair market rent; cap rate 6.5–7.5%
Non-compete	3–5 years; 5–25 mile radius; NY sale-of-business non-competes generally enforceable under BDO Seidman v. Hirshberg standard
Working capital peg	Cash-free / debt-free standard; D&TC-specific: A/R aging (60+ day A/R discounted), MMC capitated payments timing, 340B receivables (for FQHC look-alikes), self-pay collections aging
Escrow / R&W holdback	8–12% for 12–24 months. R&W insurance increasingly common above $15M. PHHPC-denial-specific indemnification standard.
Quality of Earnings (QoE)	Buyer-paid above $2M EBITDA. Sell-side QoE strongly recommended — PE diligence on D&TCs is especially detailed.
Regulatory transition risk allocation	Who bears risk of PHHPC denial, MMC plan termination, payer claw-back — negotiated explicitly. Typical: seller bears pre-LOI exposure, buyer bears post-close, gap period split.

The regulatory stack behind every Article 28 sale

NY State

PHHPC CON — the master regulatory transition; 6–14 months.
NY DOH operating certificate transfer — runs in parallel with PHHPC; DOH issues the post-CON operating certificate.
Medicaid Managed Care plan transitions — each MMC plan separate workstream; Healthfirst, MetroPlus, Fidelis, EmblemHealth Enhanced Care, MVP, Empire BCBS HealthPlus, Affinity, Molina, Healthplus, Healthcare Partners.
NY State Medicaid (eMedNY) — provider re-enrollment; 5-year revalidation cycle.
Article 28 sub-type-specific: OASAS approval for OTPs, NY Office of Mental Health (OMH) coordination if integrated Article 31, NY Board for Professional Medical Conduct (BPMC) physician licensure transitions.

Federal

CMS PECOS — Medicare provider re-enrollment on CHOW; 60–90 days typical.
CMS conditions of participation — ASC, dialysis ESRD bundled payment, FQHC, OTP sub-type-specific.
340B Drug Pricing Program — for FQHC look-alikes; HRSA notification on ownership change.
SAMHSA OTP certification — for opioid treatment programs.
DEA Schedule II registration — for OTPs and pain medicine D&TCs.
Stark Law — strict liability; pre-screen mandatory for any D&TC billing designated health services to Medicare.
Anti-Kickback Statute — intent-based; medical director arrangements, per-click leases, marketing relationships diligenced aggressively.
HIPAA — PHI handover and Business Associate Agreement transitions.

Commercial payer credentialing

Empire BlueCross BlueShield, Aetna, Cigna, UnitedHealthcare, EmblemHealth, MVP, Oxford. 60–180 days re-credentialing windows on ownership change. Build credentialing-gap revenue escrow into deal structure.

Frequently asked questions

What is an Article 28 clinic and why does it sell at a premium?

Article 28 of NY Public Health Law governs Diagnostic and Treatment Centers (D&TCs) — freestanding outpatient facilities licensed by the NY DOH. Article 28 D&TCs include primary care clinics, diagnostic imaging, ambulatory surgery centers, dialysis, methadone/OTP, and FQHC look-alikes. They sell at a premium (6×–11× EBITDA) because the Article 28 license itself is a scarce asset — new licenses require a 12–18 month PHHPC CON. Buyers pay for the license-protected revenue stream and regulatory moat.

What is the PHHPC CON process?

Any 10%+ ownership change requires NY DOH approval through the Public Health and Health Planning Council. The buyer files a CON application detailing proposed structure, financial capacity, character/competence, and continuity. PHHPC reviews run 6–14 months. Most Article 28 transactions use a two-step close (initial on management entity/real estate; deferred on license-holder entity post-CON).

What multiples do Article 28 D&TCs sell for in 2026?

Primary care D&TC: 5×–8×. Diagnostic imaging: 6×–10×. ASC: 7×–11× (highest in NY healthcare). Dialysis: 7×–10× (three-buyer universe). OTP/methadone: 5×–9×. FQHC look-alike: 4×–7×. License premium typically 1.0×–2.0× EBITDA above a comparable office-based practice.

Who are the active PE buyers in 2026?

Primary care: Optum, VillageMD, agilon, Privia; strategic systems Mount Sinai/NYU Langone/Northwell/Montefiore. Imaging: RadNet, Akumin, US Radiology Specialists, SimonMed. ASC: USPI/Tenet, SCA, Surgery Partners, AmSurg, Atlas Healthcare Partners. OTP: BayMark, Acadia, Pinnacle, Behavioral Health Group. Dialysis: DaVita, Fresenius, U.S. Renal Care. We currently have multiple active buy-side mandates across these segments.

How long does an Article 28 sale take?

12–18 months from engagement to funded close. PHHPC CON is the dominant timing variable: administrative approvals 4–8 months, full PHHPC committee approvals 9–14 months. Two-step closes deliver economic close at month 4–6 with regulatory close at month 10–16. ASC, dialysis, and OTP add CMS, SAMHSA, and DEA workstreams.

What is the Medicaid Managed Care impact?

Article 28 D&TCs typically have significant MMC revenue (Healthfirst, MetroPlus, Fidelis, EmblemHealth Enhanced Care, MVP, Empire BCBS HealthPlus, Affinity). Each MMC plan requires its own credentialing transition (60–180 days). Plans often have anti-assignment provisions. Build a plan-continuity workstream from LOI through 90 days post-close with escrow holdback for credentialing-gap revenue.

Does Stark Law and AKS apply?

Yes. Article 28 D&TCs are subject to Stark (if billing Medicare for designated health services) and AKS. Pre-sale pre-screen mandatory — focus areas: physician compensation, medical director arrangements, per-click leases, joint-venture structures. We coordinate with NY healthcare regulatory counsel (Manatt, Garfunkel Wild, Epstein Becker Green, Greenberg Traurig) to pre-screen pre-LOI.

Does Nexus Bridge charge upfront fees?

No. Success-only commission. 10% on first $1M, 8% on $1M–$5M, 6% on $5M–$10M, Lehman-formula scaling above $10M. CON preparation, NY healthcare M&A counsel coordination, sell-side QoE, and Medicaid Managed Care transition planning included at no additional cost.

How a Nexus Bridge Article 28 engagement runs

Free 30-minute confidential conversation. Practice profile, timeline, target valuation, PHHPC posture. $0, no obligation.
Buy-side mandate match check. Within 48 hours we tell you whether your specific D&TC profile matches an active buy-side mandate we represent, or whether we run a broader process.
Free evidence-based valuation. NY D&TC comparable transaction analysis with sub-type-specific multiples. Delivered in writing within 7 days.
Engagement letter. $0 upfront retainer, success-only commission. 12-month exclusivity, 12-month named-buyer tail.
Stark / AKS pre-screen. NY healthcare M&A counsel reviews medical director arrangements, leases, JV structures, physician compensation pre-LOI.
Sell-side Quality of Earnings. Coordinated with healthcare-experienced CPA firm to defend normalized EBITDA before going to market.
CIM preparation. Confidential Information Memorandum tailored to PE-buyer expectations: payer mix, MMC plan portfolio, MIPS/HEDIS scores, lease portfolio, physician roster, EHR.
Targeted buyer outreach. Active mandate match plus broader market outreach to sub-type PE platforms and strategic health-system acquirers.
Multi-LOI negotiation. Comparison framework on cash split, rollover, earnout, employment, real estate, PHHPC risk allocation, platform fit.
PHHPC CON workstream. Buyer-counsel-led but coordinated; we manage the seller side of CON information requests, character-and-competence documentation, and the gap-period operating plan.
Two-step close coordination. Initial close (month 4–6) on MSO + RE; deferred close (month 10–16) on license-holder entity post-PHHPC.

Sell an Article 28 Clinic in NY

2026 Article 28 valuation multiples by sub-type

The PHHPC CON process — the dominant timing variable

What PHHPC reviews

Administrative vs. full PHHPC committee review

Two-step close structure

Active PE and strategic buyers for NY Article 28 D&TCs

Primary care D&TC consolidators

Diagnostic imaging D&TCs

Ambulatory surgery centers (ASCs)

OTP / methadone clinics

Dialysis

Key value drivers for Article 28 D&TC valuation

2026 deal structure norms for Article 28 transactions

The regulatory stack behind every Article 28 sale

NY State

Federal

Commercial payer credentialing

Frequently asked questions

How a Nexus Bridge Article 28 engagement runs

Active buyer mandates right now

Talk to a Buyer for Your Article 28 D&TC