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Mergers and Acquisitions: A Practical Guide for Community Health Centers

Illustration of two people using map and compass

If you want to go fast, go alone. If you want to go far, go together.

—African proverb

Federally Qualified Health Centers (FQHCs) — like most provider organizations — are grappling with an array of external pressures, including systemic changes unleashed by value-based care, shifting demographics in the communities they serve, and the ongoing impact of the COVID-19 pandemic. Because these factors have exacerbated existing pressures on public health reimbursement, many health centers are exploring acquisitions and mergers as a means of ensuring sustainability, expanding services, and maintaining patient access to basic health care services in underserved areas.

Regardless of the underlying catalyst, health center consolidations can be complex to navigate, particularly for those without experience in this area. This guide should help you navigate the process to consummate an effective merger or expansion so you and your new partner can get back to the essential job of providing high-quality health care and enhanced access to the communities you serve. To further increase your knowledge in this area, we also recommend consulting CHCF’s October 2019 publication Building to a Sum Greater Than Its Parts: A Hands-On Guide to Cultural Integration in Community Health Partnerships and Alliances.

Given that the trend toward consolidation will likely continue, CHCF has created this manual to provide support and guidance for health centers contemplating a consolidation with another provider entity. The full guide is available under Document Downloads, as well as a set of Mergers and Acquisitions Tools that we invite you to adapt to your own needs.

Topics Covered

This guide will walk you through the following topics:

  • Defining Goals and Exploring Options
  • Choosing a Partner and Developing a Plan
  • Conducting Due Diligence
  • Establishing Teams and Reviewing Documents
  • Managing Payer Transitions
  • Contract Review and Assessment
  • Developing a Communications Plan
  • Developing a Human Resources Integration Plan
  • Integrating Service Lines, Departments, and Facilities
  • Reviewing Acquisition Agreements

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