Due Diligence Checklist for Podiatric Physicians
1) Deal Structure and Valuation
* Ownership vs. management-only model: current
stake and post-transaction ownership.
* Earn-out mechanics specific to podiatry metrics
(e.g., procedure mix, surgery volumes, implant
reimbursements).
* Valuation basis: surgical margins, implant
costs, managed care mix, diabetic foot care
volume.
* Exit provisions: buy-backs, partial exits, tail
revenue streams (e.g., post-op follow-ups).
2) Governance and Control
* Board composition and physician seats; reserved
matters (clinical protocols, implant purchases,
facility expansion).
* Decision rights on procedure mix, outsourcing
(e.g., off-site imaging, custom orthotics
fabrication).
* Deadlock provisions and tie-breakers relevant to
sharing facility decisions.
3) Autonomy, Clinical Standards, and Culture
* Scope of clinical autonomy: surgeries (e.g.,
bunion, ingrown toenails), anesthesia policies,
wound care protocols.
* Leadership roles: retained podiatrist leaders
(surgical director, clinical lead) and reporting
structure.
* Culture fit: integration plan for podiatry team,
orthotics/prosthetics staff, and WOC nurses.
4) Compensation, Incentives, and Financial
Protections
* Base salary vs. production-based incentives;
instrument/device procurement control.
* Earn-out targets tied to podiatry-specific
metrics (procedure volumes, grafts, implants,
diabetes foot exams).
* Post-transaction liabilities: malpractice tail,
CME coverage, credentialing for devices and
implants.
5) Compliance, Privacy, and Data Security
* HIPAA/privacy controls around podiatry notes,
imaging, and diabetic foot records.
* Billing integrity for surgical codes (CPT/HCPCS)
and implant-associated charges; anti-kickback
safeguards. Are the implants being provided owned
by the large group.
* Define must-have vs. nice-to-have
Must-haves: autonomy over surgical decisions,
independent leadership roles, clear podiatry-
specific earn-out metrics, backed by data on
foot/ankle procedures.
Nice-to-haves: dedicated podiatry imaging access,
enhanced lab/orthotics integration, staged
integration with clear go/no-go criteria.
* Demand open books on podiatry operations
^ Require access to implant inventory costs,
supplier contracts, and any capex for surgical
suites or orthotics fabrication.
* Ask for independent audits of clinic
profitability by site.
Exit ramps and flexibility
*Include options to buy back or sell remaining
interests with clear pricing mechanisms.
* Build in a path to independent practice if
performance targets are not met.
* What do you get if the large group sells after
acquiring your practice
Engage advisory team early
* Have a podiatry-focused attorney, a healthcare
M&A advisor with PE experience, and a financial
clinician peer review draft terms.
* Consider staged signing contingent on due
diligence outcomes.
Sev Hrywnak, DPM, MD, Chicago, IL
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