Medical Practices for Sale and Acquisition in Minnesota

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.

Minnesota has 16 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. Because Minnesota limits ownership of medical practices to licensed physicians, investor-backed buyers usually work through a management company that partners with a physician-owned practice.

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

Generally no. The Minnesota Supreme Court has confirmed the state's corporate practice of medicine doctrine, so corporations may not employ physicians unless a law allows it, though nonprofit corporations may. Physicians use professional firms such as professional corporations, PLLCs or PLLPs, owned by licensed professionals, and outside investors usually work through a management company.

What changed recently: Minnesota's 2023 health care transaction law requires notice to the Attorney General and the Health Department 60 days before closing when a party has $80 million or more in average revenue, and the Attorney General can sue to block a deal. Deals with parties between $10 million and $80 million must report data 30 days before closing. Minnesota also banned most non-competes in 2023. 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 Minnesota, Medicaid (Medical Assistance) runs mostly through health plans, so your mix of Medicaid, Medicare and commercial patients and the plans you contract with weigh heavily in the price. The state has 222 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.

Minnesota's top income tax rate is 9.85%, capital gains are taxed as ordinary income, and an extra 1% tax applies to net investment income over $1 million. We help you compare the options with your CPA before the practice goes to market.

Minnesota banned non-competes for employees, including physicians, in agreements signed on or after July 1, 2023.

The ban does not stop a seller from agreeing to a reasonable non-compete with the buyer of a business, so a non-compete can still be part of a practice sale. Your attorney should review the time and area.

Minnesota does not set one clear retention period for physician office records, so ask your attorney how long to keep them. Many Minnesota practices keep them at least 7 years after the last visit.

Before closing or selling, it is good practice to name a records custodian and tell patients how to get their records. In a sale, the buyer usually becomes the custodian of the records, and we make sure this is written into the purchase agreement.