Blog Post

Regulatory Due Diligence – Critical for Healthcare Mergers and Acquisitions

Richard P. Kusserow | June 2019

Companies see tremendous return on investment (ROI) for employing the right experts

Mergers and Acquisitions (M&A) are taking place at an increasingly rapid pace, and due diligence is an essential part of that process. Conducting due diligence reviews can provide vital information in assessing value and potential liabilities.  Public accounting firms can assess an entity’s financial accountability and viability by evaluating balance sheets, income statements, audit reports, and cash flow statements and projections. Law firms can examine the entity’s structure, business permits and/or approvals, labor and environmental law compliance, permits and contractual rights and obligations, property rights and obligations, tax and consumer protection exposure risks, and any current or pending litigation. These assessments may be sufficient for other sectors; however, the health care is another story. It is one of the most heavily regulated sectors with high expectations for organizations’ compliance programs, and it includes significant risks of inheriting serious regulatory liabilities that can result in multi-million dollar payments. Regulatory due diligence should identify any compliance gaps in applicable laws and regulations and recommend corrective action measures that can mitigate liability exposure. The right kind of experts can ask the right questions to identify problem areas and identify risk areas and vulnerabilities within days, not months. Proper experts can also conduct a compliance program assessment, evaluate high-risk area internal monitoring, conduct claims audits and extrapolations, review arrangements, and monitor ongoing auditing processes. Regulatory due diligence reviews can not only avoid future liabilities, but they can also provide a tremendous return on investment.

To learn how Strategic Management can evaluate or assist with your due diligence, please contact Dr. Cornelia Dorfschmid, an experienced and recognized health care regulatory due diligence expert, at cdorfschmid@strategicm.com or (703) 535-1419.

About the Author

Richard P. Kusserow established Strategic Management Services, LLC, after retiring from being the DHHS Inspector General, and has assisted over 2,000 health care organizations and entities in developing, implementing and assessing compliance programs.

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