Private Equity MSOs: M&A Freeze? Perfect Time to Look at Compliance!

Reid Pearlman, JD, CCEP
Jul 10, 2024
2 min read

Healthcare private equity-backed MSOs, buckle up! With high borrowing rates stifling acquisitions for at least the next 12-18 months, it's time to shift gears. Along with an inward focus on increased efficiency and organic growth, why not look at compliance, too? This time presents a golden opportunity to solidify your portfolio company's compliance program. Here's why:

Reduced Acquisition Frenzy = Increased Regulatory Scrutiny Historically, a strong M&A market often distracts regulators from scrutinizing individual organizations. However, with acquisition activity slowing down, and PE firms getting more prominent on the enforcement radar, management service organizations (MSOs) can expect regulators to sharpen their focus. This makes a robust compliance program more critical than ever.

Compliance as a Competitive Advantage A strong compliance program demonstrates a commitment to key MSO services, like accurate billing, promoting patient safety and reinforcing data security. This not only mitigates risk and potential penalties, but also positions your MSO as an attractive future acquisition partner. Investors, and physician practice targets, are increasingly seeking partners with demonstrably solid compliance practices.

Investing in Your Portco's Future By implementing and strengthening your compliance program now, you're laying the groundwork for future success. This proactive approach streamlines operations, fosters a culture of ethical practices, and minimizes potential disruptions.

We Can Help True Compliance Consulting can guide your MSO through the intricacies of compliance. From conducting risk assessments to developing and implementing effective programs, we can ensure your portfolio company is well-positioned for the future, regardless of market conditions. And, a fractional Compliance Officer arrangement can achieve this sensibly and cost-effectively.

Don't let a slowdown become a setback. Invest in compliance and empower your MSO to thrive in any market climate.

Reid Pearlman is an independent healthcare compliance consultant at True Compliance Consulting in Atlanta, Georgia. He may be reached at Reid@MyComplianceOfficer.net.