Post-Closing Issues in Healthcare Transactions

This post concludes our Healthcare Transactions Series, where we have explored the legal, operational, and strategic issues that matter most to providers, investors, and entrepreneurs in the healthcare space.

Closing a healthcare transaction is a major milestone—but it’s not the end of the road. Critical post-closing tasks must be addressed to preserve deal value, ensure regulatory compliance, and mitigate post-closing risk. In heavily regulated industries like healthcare, these obligations are not merely best practices—they’re essential. This final installment highlights the key post-closing issues parties should anticipate and common pitfalls to avoid.

1. Notify Regulators and Third Parties

One of the most urgent post-closing priorities is ensuring timely notification to regulators and key third parties. In manyhealthcare transactions, these filings are not optional. For example:

• Medicare and Medicaid: If the acquired provider is enrolled in federal or state healthcare programs, a Change of Ownership (CHOW) filing with CMS or the appropriate Medicaid agency is often required within a definedtimeframe.
• Private Payors: Many commercial payor agreements require prior written notice or consent for an assignment. Missing these steps can lead to payment disruptions or even contract termination.
• Other Third Parties: This includes hospital suppliers, property landlords, accreditation bodies, and professionallicensing agencies. Many jurisdictions also require filings to update ownership records with licensing boards or health departments.

Failure to meet these deadlines may result in financial and regulatory setbacks. Maintain a checklist and calendar of required notifications to avoid compliance gaps and operational delays.

2. Maintain Comprehensive Records

Post-closing documentation is more than a formality—it’s foundational to protecting the integrity of the transaction.

• Closing Binders: Counsel should compile and distribute a comprehensive binder of all final, executed transaction documents. These are now typically digital.
• Closing Memorandum: A concise memo summarizing the deal’s key terms, survival periods, indemnity mechanics, and post-closing covenants can be invaluable to business and compliance teams.
• Corporate Records: Update stock ledgers, LLC membership registers, and corporate governance documents (e.g.,operating agreements or bylaws) to reflect the new ownership structure.

Thoughtful documentation now prevents confusion—and litigation—later.

3. Monitor Indemnification, Escrows, and Post-Closing Liabilities

Indemnification provisions and escrow arrangements are only as effective as the post-closing diligence applied to them.

• Track Survival Periods: Parties must closely monitor deadlines for asserting claims tied to breaches of representations and warranties. Mark these dates on internal calendars and set early reminders.
• Manage Escrows: If the agreement includes a holdback or escrow account, ensure a process is in place for submitting and responding to claims before funds are released.
• Sellers’ Obligations: Sellers should maintain reserves or ensure availability of escrowed funds to satisfy legitimate claims.

For a deeper dive, read our full post on Indemnification and Escrows.

4. Comply with Post-Closing Covenants

Many healthcare deals include covenants that extend beyond the closing date. These may include:

• Restrictive Covenants: Non-compete, non-solicit, or non-disparagement obligations applicable to the seller.
• Operational Covenants: Buyer commitments to retain employees, preserve billing practices, or maintain certain service levels.

Establish clear internal ownership and accountability for these obligations. Circulating the closing memorandum to operational and compliance leaders can help ensure alignment.

See our earlier post on Representations, Warranties, and Covenants for more.

Common Post-Closing Pitfalls to Avoid

Even well-structured deals can falter if post-closing issues are neglected. Common mistakes include:

• Missing Regulatory Deadlines: Late filings can delay reimbursements or threaten provider enrollment.
• Disorganized Records: Inadequate documentation hampers dispute resolution and compliance responses.
• Lost Indemnification Rights: Missing a claim deadline can nullify valuable protections.
• Covenant Violations: Overlooking or mismanaging post-closing covenants can expose parties to breach claims.

Avoid these pitfalls by instituting robust post-closing protocols and calendaring key milestones.

Final Thoughts

Closing is just the beginning. By proactively managing post-closing obligations, parties can maximize value, maintain compliance, and avoid disputes.

This post marks the conclusion of Mooradian Law’s Healthcare Transactions Series. You can catch up on

Need Guidance on a Healthcare Transaction?

Our team regularly advises buyers, sellers, and investors on the full lifecycle of healthcare transactions—from LOI to post-closing. We’re here to help you navigate each phase with clarity and confidence.

Email: info@mooradian.law

Phone: (734) 219-4890

About the Author

Serj Mooradian is a healthcare attorney and the founder of Mooradian Law. With over a decade of experience at leadingnational firms, Serj advises clients on transactions and regulatory matters, including Stark Law, Anti-Kickback Statute, HIPAA, and fraud and abuse compliance. He brings a practical, business-oriented approach to every engagement.