Post-Merger Integration Strategy Starts Early

Achieving Post-Merger Success: Essential Steps for Effective Integration

Post-merger integration with an acquired practice significantly impacts post-merger success and a timely return on investment. The most successful companies outline a post-merger integration strategy early in the acquisition process. Early planning ensures compliance due diligence, alongside financial and regulatory due diligence, is addressed.

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Common Pitfalls in Post-Merger Integration

Surprisingly, many companies acquire practices with little forethought to post-merger integration. This oversight often results in a chaotic post-close environment and at-risk processes remaining unknown and unaddressed by the acquiring company.

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Key Steps for a Successful Post-Merger Integration Strategy

1. Decision Making: Determine how and when post-merger integration will occur. Will the acquired practice operate independently for a period? What is the anticipated timeframe?
2. Integration Strategy: Plan for the timely integration of vital corporate functions.
3. Board Oversight: Extend Board oversight to the post-merger integration function.

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Areas of Consideration

• Electronic Health Record: Will the new practice transition to the acquiring company’s system? If not, are the two systems compatible?
• Corporate Communication Systems: How quickly will the acquired company be integrated into corporate communication systems (email addresses, access to the company intranet, etc.)?
• Human Resources Programs: How will the newly acquired employees/providers be onboarded? When will the employee handbook be distributed? How will benefits be connected to employees/providers?
• Physical Facilities: Will staff be integrated, or will two separate offices co-exist? Consider the impact on company culture.
• Day-to-Day Operations: How will the new practice be incorporated into existing operational procedures?
• Financial Operations: How will consistency be ensured across accounts payable, accounts receivable, and revenue cycle policies and procedures?
• Compliance and Ethics Program: How will you ensure that the existing company’s Code of Conduct and policies are implemented promptly? When will training for officers, employees, and the Board occur? Will there be a separate Compliance Officer for the new practice?

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Importance of Early Planning

Planning for post-merger integration during the diligence phase is critical. A solid integration strategy allows for a meaningful review of existing agreements to ensure they fit within your integration plan (e.g., EMR, financial systems). Additionally, a compliance

diligence review component in the early acquisition phase allows for timely updates to the company’s compliance risk assessment and annual work plan. This ensures identified compliance issues are addressed, audited, and monitored.

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Steps to Take When Acquiring a Practice

1. Conduct Comprehensive Due Diligence: Perform compliance due diligence in addition to financial and regulatory reviews.
2. Develop a Post-Merger Integration Strategy: Establish a clear integration strategy.
3. Assign a Senior Leader: Appoint a senior leader to oversee post-merger integration.
4. Separate Integration Responsibilities: Consider separating integration responsibilities from day-to-day operations to ensure success and timeliness.
5. Set an Integration Timeline: Establish a timeline with key milestones.
6. Hold the Integration Team Accountable: Ensure the integration team is accountable for meeting milestones and objectives.

For more information about our services and assistance in establishing a post-integration strategy, contact us today.

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Final Thoughts

Effective post-merger integration is crucial for achieving a timely return on investment. By planning early, involving senior leadership, and addressing compliance alongside financial and operational considerations, you can ensure a smoother transition and long-term success.

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