Medical Practices for Sale and Acquisition in Alabama

The most active buyers right now are hospitals and health systems, physician groups backed by private equity, Federally Qualified Health Centers (FQHCs) and individual physicians who want to own a practice.

Alabama has 17 federally funded health center organizations (HRSA, 2025), and about 59% of people on Medicare in the state are in Medicare Advantage or other private plans (KFF, 2024). That makes groups focused on value-based care especially interested in primary care practices with many senior patients. Alabama does not bar non-physicians from owning a practice the way stricter states do, so investor-backed groups can often buy more directly.

We can tell you which buyer types are most active for your specialty and location.

Often, yes. Alabama law does not ban lay ownership, and state medical boards have said a business corporation may employ physicians as long as no unlicensed person controls medical decisions. Fee-splitting rules still apply. Physicians commonly use a professional corporation or professional LLC.

What changed recently: we are not aware of any new Alabama law from 2023 to 2026 on practice ownership, private equity deals or physician non-competes. Rules like these change often, so have a health care attorney review the deal structure.

Most practices are valued on their adjusted yearly profit, often called EBITDA or seller's discretionary earnings, times a multiple. The multiple goes up with steady revenue, a loyal patient base, providers and staff who will stay, clean financial records and a practice that does not depend only on you. It goes down with heavy reliance on one payer, falling patient numbers or a short lease.

In Alabama, Medicaid uses care coordination networks instead of managed care plans, so your mix of Medicaid, Medicare and commercial patients and the plans you contract with weigh heavily in the price. The state has 124 primary care shortage areas, and practices that serve these communities often draw strong buyer interest because patients have few other options.

A confidential valuation is the best way to see where your practice stands.

All three can work, and the right choice depends on your goals and the buyer. Selling the building with the practice gives you one clean exit and more cash at closing, but some buyers cannot finance both. Leasing it to the buyer gives you steady income and often makes the practice easier to sell, as long as the rent and terms are at market rate and the lease is long enough for the buyer's lender. Keeping the building and leasing it to someone else is also an option if you want to hold it as an investment.

Alabama's top income tax rate is 5%, some cities add a local tax, and capital gains are taxed as ordinary income. We help you compare the options with your CPA before the practice goes to market.

Possibly not. Alabama's restrictive covenant law treats physicians as professionals, and non-competes for professionals are generally not enforceable.

The same law allows non-competes tied to the sale of a business, but whether that covers a physician selling a practice has not been clearly settled. Buyers usually still ask for one, so your attorney should review how it is written.

Alabama requires adult records to be kept at least 7 years after the last contact, and minors' records for 7 years or until 2 years after they reach adulthood, whichever is longer.

On a sale, the records must go to a physician or a HIPAA-compliant custodian, and active patients seen in the last 36 months must be told within 30 days of the transfer. If you retire, patients must get at least 30 days notice. In a sale, the buyer usually becomes the custodian of the records, and we make sure this is written into the purchase agreement.