You signed the letter of intent (LOI). The valuation is set and it feels like the hard part is behind you.

It isn’t. We recently had a behavioral health/mental health owner sign an LOI. We took the high level questions the acquirer first asked and aggregated them here while maintaining confidentiality.

The LOI is the starting gun for the most intensive scrutiny your company will face. Acquirers move from “does this business make sense?” to “can we prove every number and every claim?” For behavioral health owners: where treatment modalities, licensure, and payer mix add layers most buyers don’t see in other sectors. Knowing what’s coming lets you walk in prepared instead of reactive.

Here’s what to expect across the five areas that matter most.

1. Financial

Diligence teams will reconcile every dollar of collected revenue against payer remittances, refunds, and any incentive or bonus payments layered on top of standard reimbursement. If distributions, owner loans, or personal expenses have run through the practice’s accounts, expect detailed questions. These need to be cleanly separated from operating performance to support a defensible adjusted EBITDA. Equipment purchases for specialty treatment devices sometimes get expensed rather than capitalized; it is something to note beforehand. And any compensation structure that changed mid-year needs a clear paper trail explaining why.

2. Legal

If your clinic space is leased from an entity you or a partner owns, expect the lease terms to be tested against market rates. Buyers will also confirm your corporate structure supports compliant operations. Many behavioral health practices operate under a management services arrangement, and that structure gets a close look. Provider employment agreements, restrictive covenants, and your malpractice claims history (including limits and any tail coverage) round out this workstream.

3. HR

Be ready to walk through your org chart and explain who owns what, especially where clinical and administrative responsibilities overlap. Provider credentialing such as licensure status, certifications, continuing education, needs to be current and documented. If compensation or bonus arrangements exist as informal understandings rather than written policy, this is fine but document as much of how it works as you can.

4. Technology

Your EHR and billing systems will be evaluated for how well clinical documentation, scheduling, and revenue cycle management actually integrate. Denial rates, resubmission timelines, and any manual workarounds outside your core systems are common findings. Data security and HIPAA compliance such as access controls, PHI handling, any prior incidents get their own dedicated review.

5. Regulatory

Expect verification of every state license tied to your locations and providers, along with your Medicare/Medicaid enrollment status. If your practice bills specialty modalities with unique reimbursement structures, buyers will scrutinize the rate logic and any clawback exposure tied to incentive programs.

None of this is designed to derail your deal, it’s designed to confirm the value everyone already agreed on. Owners who organize this documentation before the LOI, not after, move through this period faster and with far less stress.

If you’re a behavioral health practice owner considering a sale in the next 12–24 months, a sell-side readiness assessment can show you exactly where you stand before a buyer ever asks the question. We can help with that.