Prerequisites
- Your launch state and required license type identified
- Counsel engaged
- A written role description covering both compensation streams
Sourcing
See The friendly PC, explained for why this ranking matters.
Steps
1
Verify the license at primary source
Not a copy they send you. Check the state licensing board’s own verification system. Confirm: active status, no restrictions, expiration date, and the exact name and license number.For multi-state candidates, verify in every state where they’d own an entity.
2
Check disciplinary history
The state board’s public disciplinary records, plus any other state where they’ve held a license. Ask the candidate directly, in writing, about any past or pending action — the discrepancy between what they disclose and what you find is more informative than either alone.
3
Run exclusion and debarment checks
- OIG List of Excluded Individuals/Entities, an excluded owner taints federal healthcare program billing for the entire entity
- SAM.gov, federal debarment
- State Medicaid exclusion lists, many states maintain their own
4
Check Medicare enrollment and opt-out status
In PECOS. A physician who has opted out of Medicare has private contracts with beneficiaries and cannot be enrolled as you expect, which affects group enrollment. Confirm before building a Medicare-dependent model.
5
Review malpractice history
Request a carrier loss run and, where appropriate, ask the clinician to run an NPDB self-query and share the result. Malpractice history affects both insurability and payer credentialing.
6
Get other-PC ownership disclosed in writing
Ask directly: what other professional entities do you own or have an interest in? Conflicts matter — a candidate owning a competing PC, or holding MSAs with other management companies, creates problems ranging from competitive conflict to diligence complications.A nominee owning a dozen unrelated PCs has a dozen conflicts and no operational knowledge of yours.
7
Assess personal reliability and succession readiness
Less formal, equally important:
- Do they intend to be involved, and do they have the time?
- Are they geographically stable?
- Are they financially stable? Their creditors could in principle reach their shares.
- Immigration status, where relevant — visa-dependent clinicians may face ownership constraints. Ask counsel.
- Would they accept a transfer restriction agreement?
- Can they name a plausible successor?
8
Confirm they will retain independent counsel
Not yours. Paying for their counsel is appropriate; selecting and directing it is not. A candidate unwilling to get their own lawyer is a candidate who has not understood the exposure.
9
Document everything
Every verification, dated, with the source. This file is what you produce in diligence and what demonstrates you exercised care.
Red flags
Verify it worked
- Primary source license verification, dated and saved
- Disciplinary history reviewed in every relevant state
- OIG LEIE clear, documented
- SAM.gov clear, documented
- State Medicaid exclusion lists clear
- PECOS enrollment and opt-out status confirmed
- Malpractice history reviewed
- Other-PC ownership disclosed in writing
- Independent counsel engaged by the clinician
- A named successor candidate identified
- Monthly re-screening added to the compliance calendar