• Revenue Cycle Management
  • COVID-19
  • Reimbursement
  • Diabetes Awareness Month
  • Risk Management
  • Patient Retention
  • Staffing
  • Medical Economics® 100th Anniversary
  • Coding and documentation
  • Business of Endocrinology
  • Telehealth
  • Physicians Financial News
  • Cybersecurity
  • Cardiovascular Clinical Consult
  • Locum Tenens, brought to you by LocumLife®
  • Weight Management
  • Business of Women's Health
  • Practice Efficiency
  • Finance and Wealth
  • EHRs
  • Remote Patient Monitoring
  • Sponsored Webinars
  • Medical Technology
  • Billing and collections
  • Acute Pain Management
  • Exclusive Content
  • Value-based Care
  • Business of Pediatrics
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Practice Growth
  • Concierge Medicine
  • Business of Cardiology
  • Implementing the Topcon Ocular Telehealth Platform
  • Malpractice
  • Influenza
  • Sexual Health
  • Chronic Conditions
  • Technology
  • Legal and Policy
  • Money
  • Opinion
  • Vaccines
  • Practice Management
  • Patient Relations
  • Careers

Buy-sell agreements depend on buyout calculation

Article

The buyout calculations for buy-sell agreement can prove contentious. Find out how you can make the calculations less frustrating.

A: Perhaps the most contentious area of a buy-sell agreement is the method for calculating buyouts. A misstep can lead to an overvaluation, costing the practice more money than it owes. If the practice undervalues the buyout, however, the departing partner may think he or she deserves more money, leading to an expensive and time-consuming legal battle.

Many practices use a fair market value (FMV) approach, relying on lawyers and third-party appraisers to calculate the price of a buyout. Using FMV gives lawyers and appraisers a great deal of latitude to argue about what the buyout price should be, and this ambiguity can cause complications when a partner leaves or retires.

Answers to our readers questions were provided by Reed Tinsley, CPA, CFP, CHBC, a healthcare accountant and business adviser in Houston, Texas.

Send your money management questions to medec@advanstar.com
.

Related Videos
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health