Issue link: https://read.dmtmag.com/i/48253
16 Smart Talk MERGERS & ACQUISITIONS Clean house for fast sale BY STEPHANIE MORGAN GREENE Q. What can I do to speed up the sale of and get the price I want for my company? A. When you're selling a home, everyone understands the importance of tidying up and showing the house in its best light. As the seller, you clean and organize the closets, touch up paint, and gather documentation on improvements to show that the home is in good condition and no major repairs are needed. The same concept should be applied to your company. When selling a DME company, pay specific attention to the threat of payer audits. For a faster sale, demonstrate compliance with Medicare coverage guidelines and the ability to easily weather post and pre-pay audits. Just WWW.HMENEWS.COM / DECEMBER 2011 / HME NEWS saying you follow the guidelines isn't enough. While most buyers will require you to indem- nify them for take-backs or recoupments on claims occurring before the sale, the buyer will still be relying upon your documenta- tion and physician orders for ongoing, rental items and refill products. As the seller, you will need to ensure you have the right items in the files to be able to continue billing for services after the sale. If the burden of proof is placed on the buyer, it will slow down the sale and could lead to lower price negotiations. I recom- mend a simple first step: hire an indepen- dent, outside source to audit a percentage of the patient files. While internal auditing is always considered good practice, the inde- pendent unbiased review by a knowledge- able expert will give buyers the confidence they need to finalize the sale at the price you want. The audit should be detailed. The audit results will demonstrate that your company finances are secure, procedures correct, and the price fair. If mistakes or problems are found, you have the opportunity to correct internal procedures before a buyer inspects your business. HME Stephanie Morgan Greene is general counsel for Harrington Management Group, also known as The Audit Team. Reach her at sgreene@ theauditteam.com or 888-833-3478. The biggest news at Medtrade was actually the smallest and most innovative! BUSINESS ASSETS Leverage all of your assets BY RYAN RUSKIN Q. What is a business intangible asset? A. An intangible asset is something that typically is reflected in the line item of goodwill when evaluating a business. The basic assumption is that an intangible asset could be anything that reflects value in a non-material form. Some examples of intan- gible assets are under-utilized employee skills, referral source relationships, client databases, operational infrastructure pro- duction capacity and community presence to name a few. Identifying intangible assets can benefit Actual size. Actually! ™ Sleep Apnea Therapy SYSTEM The smallest, lightest, most portable CPAP in the world is now the most innovative. We'd like to thank everyone at Medtrade for voting us the most innovative product for 2011. Transcend is changing the way sleep apnea therapy is being delivered. The portability, small size, waterless humidification and battery options sell themselves. If you missed us at Medtrade, give us a call now to find out how you can become a key partner. Don't sleep on it. Call us today at: 877-621-9626 or visit us online at: www.MyTranscend.com Untitled-6 1 11/14/11 1:33 PM your company. In today's HME market tran- sition is the key to survival. It is essential that HME companies embrace this transi- tion with a think out-of-the box mentality. The first step in leveraging your current asset values is a full assessment of your orga- nization's tangible and non-tangible assets. CONDUCT AN ASSESSMENT There is no established procedure for con- ducting a value assessment of intangible assets; however, what I suggest is to actu- ally look at a financial goal first and then identify components of your business that would help you get to that goal. You would start by identifying a new market or prod- uct, and the potential returns, and then look back at your current operation and seek out underutilized platforms to launch into this segment such as your database, your retail walk-in and your community relationships. The benefit of identifying intangible assets is that the value to be derived from these assets have unlimited value potential, whereas tangible assets have real defined value and cost. Tangible assets typically can be reflected in book values often calculated by market values and have a fixed ceiling. However, intangible values such as client databases have an unlimited value potential based on a company's ability to leverage intangible assets utilizing new marketing techniques and channeling new products and services to a client database. HME Ryan Ruskin is an independent consultant and attorney. Reach him at ryanm17r@yahoo.com or 772-528-4818.