Medicare supplier businesses provide walkers, orthotics and prosthetics to Medicare recipients.
In 1965, President Lyndon Johnson signed the legislation that founded the Medicare program, thereby permitting Americans aged 65 years and older to have health care coverage. Medicare authorizes businesses to provide durable medical equipment such as walkers, hospital beds and wheel chairs to Medicare recipients. In addition, Medicare suppliers provide prostheses and prosthetic devices, as well as orthotics and other supplies. These suppliers, known as DMEPOS (durable medical equipment, prosthetics, orthotics and supplies) are accredited by Medicare and carry a surety bond. To acquire an existing Medicare supply business, look for accredited suppliers in your region.
Instructions
1. Identify potential Medicare supplier businesses to purchase. Visit the Medicare website and use the supplier directory to locate accredited Medicare suppliers in your region. Note the contact information for these businesses.
2. Contact businesses to find a Medicare supplier that is willing to be acquired (or that is ripe for acquisition). Verify that the business is accredited by Medicare to supply medical equipment. The accreditation process began in 2009.
3. Retain an attorney and an auditor to assist in the purchase of the Medicare supplier business. An attorney prepares documents for the purchase transaction and conducts a review of the contracts for medical equipment, leases and potential liability in litigation of the business to be acquired. The auditor reviews financial statements, tax returns, sales records, banking records and customer lists of the business to be acquired and advises you of the tax consequences for purchasing the Medicare supplier business.
4. Send a letter of intent to the business to indicate your interest in purchasing the business. This letter of intent should be drafted by an attorney. The letter does not legally obligate you to consummate the purchase; instead it notifies the business of your intention to enter negotiations to arrive at a mutual agreement to sell the business.
5. Sign a confidentiality agreement with the business and begin to assess the net worth of the business. The Medicare supplier will likely require you to agree not to release information about the business to third parties before you can begin to valuate the business. Ask your auditor to evaluate the fair market value of the business, paying particular attention to the current supply contracts, accounts receivable and payroll, pension and profit-sharing arrangements; the attorney should examine the organizational documents of the business, the zoning permits and the licenses to do business.
6. Offer to purchase the business at a price equal to the fair market value of the Medicare supplier business. Sellers and purchasers rarely agree about the fair market value of a business; therefore, negotiations will be in order. Agree to the purchase price only after receiving a favorable response from your attorney and auditor.
7. Get financing to purchase the Medicare supplier business. The U.S. Small Business Administration offers funding solutions, including loans and grants, to assist in the purchase of existing businesses. Check for local initiatives for business financing in your state.
8. Close the purchase transaction for the Medicare supplier business by signing a purchase agreement and related documents. At closing, you will finalize and sign the purchase agreement and receive financing. The seller must deliver the supply business, along with the customer lists, contracts and other relevant documents for running the business.
Tags: Medicare supplier, medical equipment, Medicare supplier business, accredited Medicare, fair market
