Provider-based MSOs: New Year = Brighter Outlook + Compliance Opportunity!

2025 brings a brighter outlook and compliance opportunity

Private equity-backed, provider-based management service companies are rightly excited about the year ahead. After the pandemic deal freeze and (seemingly endless) post-pandemic deal malaise, we are finally headed back into healthy, exciting times. Why? First, political certainty – with a new/old presidential administration in place, we will again see a consummately business-friendly officeholder. One that is expected to ease regulatory requirements, and potentially enforcement focus. Second, (maybe in part due to the first reason), credit markets are at long last opening back up.

What does this mean for PE-backed MSOs? Accumulated dry powder and improved access to capital will fuel investment, thereby increasing deal and M&A activity. Of every type. PEs will form, buy and sell portfolio companies. They will also pursue exit events, many of which were originally planned to happen over the last several years. Using traditional means, like sales to bigger PEs, and IPOs. And also alternative financing vehicles, when needed, to enable investors to cash out, or at least profit some. And MSOs will grow their market shares, by acquiring and consolidating practices.

What does this mean for your provider-based MSO? All of this increased activity puts a spotlight on compliance. Buyers expect robust compliance programs that are fully built out, effective and integrated. They will look closely during due diligence. So now is the ideal time for MSOs to prioritize compliance and gain a competitive edge.

How can we help? In a few ways. 1) Gap analysis – let us look at your compliance program and see how it compares to others in your marketplace. How does your program stack up against competitors in your specialty, market niche, and geography? Especially in the eyes of a prospective buyer or regulator? 2) Development – we are experts in designing, implementing and administering provider-based MSO compliance programs. Does your program still need one or two essential components? And 3) Integration – let us help you fully integrate acquired practices into your compliance program. Successful onboarding means merging one culture into another. Since each medical practice is unique, and effective compliance relies on solid shared culture and good communication, thoughtful integration is invaluable.

Whatever you decide to do, buckle up for an exciting 2025! May it be a year full of growth and good tidings for us all!

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

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