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Resources

Practical guidance for founders and physician practices.

Free guides, checklists and tools for two kinds of owners: founders weighing a capital partner, and independent practices looking for MSO support.

Glossary

Private equity and MSO terms, in plain English.

EBITDA

Earnings before interest, taxes, depreciation and amortization; a measure of operating cash profit.

Normalized EBITDA

EBITDA adjusted for owner-related, one-time and non-operating items (add-backs).

Add-backs

Expenses removed from EBITDA because a new owner would not incur them.

Majority recapitalization

A transaction in which an investor buys a majority stake and the founder keeps a minority stake.

Rollover equity

The portion of ownership a founder reinvests in the business at closing.

IOI

Indication of interest: a non-binding letter with a valuation range and proposed structure.

LOI

Letter of intent: a more detailed non-binding agreement on price and key terms, usually with exclusivity.

Quality of earnings (QoE)

An accounting review that tests whether reported earnings are accurate and repeatable.

MSO

Management services organization: a company that provides nonclinical services to a physician-owned practice.

Corporate practice of medicine

State laws that limit who may own a medical practice or control clinical decisions.

Revenue cycle

The process from scheduling and eligibility through coding, billing, payment and collections.

Prior authorization

Payer approval required before certain treatments, such as many infused biologics.

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