Professional Management & Marketing
3468 Piner Rd•Santa Rosa•CA•95401-3954 Ph 707-546-4433 • Fax 707-546-4437
Email: Appraiser@MedicalPracticeAppraisal.com
Data Request
Please provide the following for the Effective Date of valuation (see definition below in the Questionnaire)
1. A month by month report on production (charges) and collection (receipts) for this and last year
posted to the attached worksheet, for each doctor, and for the group as a whole
2. An accounts receivable aging report as of the valuation date (single page summary report
w/o patient names, ie 30-60-90-120+ “buckets”)
3. A copy of the last 5 years’ business tax returns: (for “mini” reports, just the prior one year’s
tax return) (Federal only), entire 1120 for incorporated practices, Schedule C, Form 4562, and
attachments for unincorporated practices, Form 1065 for partnerships.
4. Prior 3 years' Financial Statements (P&L & BS) from the computer, bookkeeper or CPA
5. A year-to-date (as of the exact valuation Effective Date) Financial Statement from the computer,
bookkeeper or CPA
6. A completed Questionnaire for Practice Valuation (below)
7. A list of the equipment, furniture, and major instrumentation, room by room. Please provide
purchase-data on any item estimated to be over $500 in value if possible and not too much work
(purchase date and purchase price are often available on the tax return depreciation schedule).
Do not list consumable supplies or non-electronic hand instruments unless of significant
value (such as vaccines, antigens, Botox™, excess radiology supplies), or unless of greater than
one month's supply and of significant value. I will assign a value of one-month's cost as current
supplies value unless instructed otherwise. If there are more than $1,000 worth of non-electronic
small surgical hand-instruments, please provide an estimated current “used” value.
8. A one or two page letter about the practice (including description of office and # of rooms),
hospital privileges, number and type of competitors in the community, busyness, lease, special
opportunities or threats, etc
9. A latest year summary of services by procedure or CPT code for each doctor and the combined
group (individual doctor data is to exclude their mid-levels or ancillary services if possible)
10. A current fee schedule
11. A Work Relative Value Unit (“WRVU”) report (if readily available), for each provider
12. A copy of the office lease and any instrumentation leases
13. A copy of any notes-payable or loans which will not be paid off with proceeds of sale or buy-in
14. A copy of any prior valuation reports
15. A copy of shareholder agreement with compensation methodology if valuation is for a buy-in
16. A copy of any contract for major source of income transferred –aside from insurance plans–
(ACO, directorships, hospital ER or in-patient reimbursement, etc)
Thank you for your assistance. Call or email me with any questions.
Keith Borglum CBB, CHBC, appraiser
Name, email & phone number of person I am to contact with any of my questions:
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Provide the following data for each provider: (or attach report)
Detailed monthly data is only needed if there were significant variables like seasonality, sabbatical, or a
period of disability or disaster; otherwise just provide annual data. We need each individual’s personal
productivity for calculation of fair market compensation of their labor. Exclude mixing in employed midlevels or ancillary services data with physician data. Group productivity or ancillary service revenue is
expected be obtained from the financial and management reports sent.
Charges
20_____
Receipts
20_____
20_____
Jan
Jan
Feb
Feb
Mar
Mar
Apr
Apr
May
May
Jun
Jun
Jul
Jul
Aug
Aug
Sep
Sep
Oct
Oct
Nov
Nov
Dec
Dec
TOTALS
TOTALS
Accounts Receivable
Total
20_____
$
(or send report summary, no names)
as of month
year
amount
Accounts Receivable Aging
0-30
31-60
61-90
90+
Special Notes if needed, or to explain significant variances (ie disability, expanded schedule, associate or
mid-level added, etc):
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Professional Management & Marketing
3468 Piner Rd•Santa Rosa•CA•95401-3954 Ph 707-546-4433 • Fax 707-546-4437
Email: Appraiser@MedicalPracticeAppraisal.com
Questionnaire for Practice Valuation
Please answer as of the effective date of the appraisal, which is to be
(typically the end of the last month or quarter for which data is available, not the date on which you are
completing this questionnaire or the date of site visit by the appraiser. If the appraisal is for a divorce,
ask your attorney). Please write "no" or "n/a" (for not applicable) or "d/k" (for don't know) answers rather
than leaving blanks. Blanks are interpreted as overlooked and may result in a follow-up call. You may use
the back or this page or a separate page if needed to expand on answers.
PLEASE PRINT LEGIBLY – DIGITAL COMPLETION PREFERRED
1) Legal name of practice:
2) The practice name if different from the legal name:
3) Address of practice:
4) Addresses of any satellite offices:
5) Do any physicians see patients at yet other offices not described above? Details;
6) Practicing at this location since:
Square feet of office:
Number of Exam rooms:
Number of procedure rooms:
X-ray or imaging equipment in office, if so list services:
Lab in office, CLIA status:
Is there an outpatient surgery suite in the office?
Are there any sub-leases to other physicians or entities, if so please detail
7) Is the practice well located? Describe location.
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8) Expiration date of current lease. Transferable? Renewal options? (please attach page from lease)
Do you believe tenant improvements have significant value to be appraised? Y / N
If so: Installation date? Cost? Were they at tenant or landlord expense? (Data may be on your
Balance Sheet or Tax Return.) If the tenant improvements are older but “like new” or recently
refurbished, and there are at least 5 years remaining on the lease (including contracted renewals
available), you may wish to have a local building contractor provide a written opinion of current
replacement value if you wish that value included.
9) Phone number of practice, website address, and email address
10) Owners’ name(s) and % of ownerships.
11) What is the legal status of the business entity (sole proprietor, partnership, S Corp, C Corp, etc)?
12) What is the purpose of appraisal?
13) If it's a sale: In a sale of a whole practice, typically only the “assets” (tangible and intangible–like
goodwill) are sold, not the “entity” (ie Corp or LLC; in other words, the seller keeps the empty
corporate shell so the buyer does not inherit the clinical and business liabilities of the entity). If this
is an entity-sale of a whole practice, please explain why. If this is a sale of a percentage of a practice
–such as in an associate buy-in or pay-out– it will be a sale of shares of the entity, so please state %
to be sold. If in doubt, ask your attorney.
Entity or Asset Sale?
% to be sold?
14) Is the practice a "going concern", meaning in normal day-to-day operation, and if not, why not?
15) What year was the practice founded/purchased?
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16) What is the specialty? Is the seller board-certified-or-eligible in that specialty?
17) Is there a second boarded specialty or sub-specialty?
18) Are there elective non-covered services offered in excess of 5% of revenues?
19) Any pre/post paid capitation, bonuses, risk pools or withholds outstanding? Amounts?
20) Does the practice accept liens and –if so– what is the amount and aging of liens outstanding?
21) Are there any atypical clinical practices for this specialty?
22) Are extenders or mid-levels used, and what type? If so, please describe.
23) Is the practice growing, declining, or remaining stable in revenues? Reasons?
24) If there are any significant variations in revenues in the past 5 years, please explain.
25) At what percentage of capacity does the practice typically operate? ("busyness")
26) How many active patients do you have? Define active.
27) How many days must a new patient wait for a routine, non-urgent appointment?
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28) How much competition is there, of what type, and of what impact?
29) Is a modern business system in place and operating efficiently? If so, please identify practice
management software name, version number if available, and company contact person or number. If
a billing service is used, please provide company name, contact name, phone number, start-date and
a brief description of the terms of the agreement and fee structure (cost).
30) How many clinical service hours per week are spent by provider(s) in patient office visits, dictation
& charting, hospital rounds, and surgery, but excluding interpreting diagnostic tests, calls to
patients about test results, dictating letters, case-conferences with mid-level providers or techs,
administration, on-call or marketing? Also exclude outside moonlighting and Directorships whose
income is not transferable to a buyer of the practice.
(Sorry – I didn't invent this definition – MGMA did and I need it for comparison. Please remember,
over-estimating your hours may decrease the value of your practice, so don't exaggerate)
31) How many total hours per week do provider(s) work in this practice? (including everything both
included and excluded in the prior question, but excluding outside activities like CME or hospital
committees unrelated to practice operations – again, don't exaggerate)
32) Name(s) of any non-owner employed physician(s), billable hours, and compensation:
33) Please provide the following information for all revenue-generating employed non-physician
licensed personnel:
Name
Avg hours per week
Salary/wage
Position/duties
Other benefit types and monthly amounts (car, insurances, club dues, travel, entertainment etc)
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34) Are there revenues sources excluded from sale or not available to a buyer? If so, please identify by
name and annual revenues.
35) What are the primary new patient sources by percentage? (benefit booklets, MD referral, ads, etc)
36) Please list the top 10 insurance plans and the percentage of patients or revenues from each. Please
also identify any capitated contracts: (or attach report).
37) Any plans above in which a new physician could not join or participate?
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38) Are the medical records legible and would they meet utilization review guidelines?
39) Is ICD and CPT coding up to date and is the doctor skilled in those topics? Who does the coding,
doctor or staff? When was the last coding class/consult attended by doctor(s)?
40) When was the last time the fee schedule was updated, and using what resources or method?
41) At what hospitals does the physician(s) have privileges?
42) Will the seller aid with practice transition to a buyer, and is an amicable transfer of ownership
anticipated? (ie stay on for at least 1 month part time to assist transition)
43) Will the seller grant the use of their personal name to the buyer for one year? (use on door, Yellow
Pages, website, etc – note that this is typically expected)
44) Will the buyer obtain the practice telephone number and website?
45) Were there any prior sales/purchases of ownership interests within the past 3 years? If so, please
provide details including: date of sale/purchase; size of interest bought/sold; price paid; how and by
whom that price was determined; terms of sale; and relationship between the buyer and seller, if
any. Please provide a copy of purchase document if available.
46) Is the practice a subsidiary or affiliate or franchise of another business, or does it have a full
management contract with an outside entity? If so, please describe.
47) Does the practice have other businesses as subsidiaries or affiliates? If so, please describe.
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48) Is any equipment or instrumentation owned by another entity controlled by the seller or seller's
family and leased to the practice? If so, please describe.
49) Please identify any business expenses in the Financial Statements of personal benefit to the
owner(s) of the practice, and amounts if unclear from the data provided (car, insurances,
retirement, club-dues, travel, excess CME, entertainment, captive insurance companies, etc. For
example, if insurances are lumped together, identify amounts of life and disability insurance to the
owner but exclude professional liability and office insurance; if health insurance is lumped together,
identify amounts to the owner & family; the same with retirement contributions.)
50) Is a family member employed, and if so, please provide name, duties, hours worked and
compensation. Is compensation "above market", and if so by how much?
51) Do any providers have claims against AR –and if so– please provide details (for example if an
associate is paid as a % of collections, some of the collections already belong to the associate)
52) Is there an up-to-date employee handbook regarding pay, benefits, termination and other policies,
are employee files and records up-to-date to state/federal requirements, and are labor postings
current?
53) List details of any expected significant capital expenditures anticipated during the next 5 years
(new computers or major instrumentation, EMR, remodel, etc):
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LIABILITIES
54) Are there any agreements restricting, limiting, or in any other way influencing the sale or right to
sell, purchase, or encumber ownership transfer? If so, please provide copies of the agreements
55) Any loans owed or secured by the practice or any practice assets? Please list any outstanding long
term debt, including owner loans to owned corporation or partnership.
56) Any equipment leased, with any residual (buyout) value? (please list and provide copies of lease)
57) Any accounts payable past-due or unpaid in dispute?
58) Any recorded but unperformed work (obstetrical deliveries, deposits on surgeries, labs, pre-paid
capitation, etc.)?
59) Balance due on equipment & furnishings?
60) Do you do your own accounting and taxes instead of using a CPA?
61) Any taxes past due?
62) Any insurance premiums past due?
63) Any real estate ownership included with liabilities? If so, please detail:
64) If the seller owns the real estate, is the rent purposefully above or below market rate?
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65) Is a forced relocation imminent for any reason?
66) Is the office neighborhood bad or deteriorating, or any known upcoming problems?
67) Any salaries, bonuses, or severance pay due to staff? If so, please detail.
68) Any staff with sick-leave or vacation accrued in excess of 2 weeks for any staff? If so, detail.
69) Any staff paid or receiving benefits over or under market rate for any special or negotiated reason?
70) Are any staff expecting a material change in their compensation, benefits or position?
71) Are there any known problematic or disgruntled staff?
72) Are there any staff pending termination?
73) Any unfunded retirement plan obligations?
74) Any pending business litigation liabilities?
75) Any pending professional-liability litigation?
76) Any past business or professional-liability litigation, Medicare audits, or occurrences that might
impact the image of the practice in the community or with referrers?
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OTHER
77) Any bankruptcy or bad credit in last 5 years?
78) Do any of the owners have any unique or special skills or relationships or licenses used in revenue
generation that will not be available to the purchaser?
79) Please provide details on any revenues received and included in the financial documents provided,
or listed on the tax returns, from sources not being transferred to the buyer (such as ER pay, board
stipends, SNF fees, authorship, etc)
80) Does the practice experience or anticipate any shortage of competent personnel for any of its key
operations? (techs, nurses, mid-levels, etc)
81) Have any key staff given notice that they will quit employment if the ownership changes, or are
any staff anticipated to do so?
82) As of the valuation date stated in the first paragraph, were there future changes known or
anticipated which had not yet occurred that could impact income or value? Have any unanticipated
changes occurred since the valuation date? If so, please detail.
83) Are there any other issues of any kind that you think might affect the value of the practice?
Please send completed Questionnaire to appraiser with the assembled data and documents. Please
identify any original documents that must be returned to you (please don’t sent originals).
Statement by Owner:
The information furnished in this questionnaire and any documents provided are materially accurate
and complete to the best of my knowledge. By my signature below I authorize my accountant and/or
my attorney to answer your questions and furnish you with relevant documents.
Signature
Date
Accountant name and phone number and/or email address:
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Attorney name and phone number and/or email address:
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