Turn-Key, High Capacity Customizable Lab – Blood, Toxicology (PCR/Molecular optional)
This seller is offering a turnkey, cutting edge Medical Diagnostic Laboratory capable of doing blood work and Toxicology (screening). It is relocating at another site in PA. Since it is relocating to another site, it is somewhat customizable, as the seller can add other capabilities (e.g. molecular diagnostics), depending on the needs of the buyer. The owner of the lab has years of experience in running a medical lab,and is in the process of creating this brand new lab to sell to a buyer. Unlike other labs, the seller is able to transfer many of her national payor contracts to the new lab. These include almost impossible to obtain national contracts of Blue Cross, United Healthcare, Cigna, and Humana, along with Medicare and PA Medicaid. It is also into a very desirable Novitas jurisdiction for Medicare.
A buyer looking to get into the diagnostics lab market, faces several hurdles when they start a lab from scratch. It will probably take about a year for somebody who is not experienced in the industry to find space, have it built out for lab, buying equipment, hiring the right people, getting the equipment calibrated, getting CLIA/CAP/COLA licenses and finally getting insurances (at least Medicare and Medicaid). One of the biggest hurdles will be getting into private insurances such as BCBS, United Healthcare, Cigna, and Humana. These are mostly closed to newer labs. One could sometimes buy a lab which already has some of these private insurances, but such labs tend to be expensive and in addition, in order to inherit these insurances, one would typically have to do a stock purchase. Stock purchase inherently carries risks – in case the seller is not running the lab cleanly or ethnically and has committed errors or fraud in Medicare or private insurance billings, the buyer can get into serious trouble, with fines and possible jail time.
What this lab offers is a turn-key lab with major national private insurance contracts including Blue Cross, United Healthcare, Humana, and Cigna which are national (these now-a-days are extremely hard to get), and hence the buyer is protected from any prior history of the lab.
This lab is therefore ideal for someone who has business but looking for a high capacity lab with insurance contracts. It is perfect for someone who in addition wants to focus on generating business and does not want to get into the management of the lab – the seller can provide turnkey management services as well. The sellers can also add additional capability to the Lab. It is not so ideal for someone who is looking to buy a lab with existing revenue and cash flow – this would not be the right lab for them.
How to Buy the Lab
Since the seller is relocating the lab to another location after getting the CLIA and some of the insurance contracts, she has decided to first find a buyer before setting up the lab. This way, the buyer maybe able to customize the lab to his/her liking.
The buyer will have to show its financial capability (as it would be not possible to get a bank loan for such a purchase). 50% of the amount will be paid up front on signing the agreement and balance 50% will be kept in escrow and paid on the completion of the successful inspection of the lab by the state of the PA (about 3-4 months after the agreement is signed).
A detailed contract will be signed when agreement is reached.
PARTIAL LIST OF WHAT IS INCLUDED
- Pennsylvania CLIA Certificate of High Complexity Testing
- Pennsylvania State Laboratory Permit of High Complexity Testing
- National Insurance Contracts for Billing which include:
- United Health Care
- HighMark BCBS(Blue Card)
- Medicare (Novitas)
- PA Medicaid
- Laboratory Information System (LIS) – Windopath from Psyche Systems Corporation
- WEB based LIS with online test order and results retrieval capability and the functionality to fax/email results.
- Billing Software (PracticeSuite) interfaced with the LIS
- Biomerieux’s Vitek 2 Compact 30 for Microbiology
- Safety Cabinet (hood), 3 FT Labconco
- Thermoscientific Heratherm Regular Incubator 180 L, large
- Thermoscientific Heratherm Co2 Incubator 180L, large
- 2 Microscopes, Binocular 4 objective, C&A Scientific
- 1 Microscope, Binocular 4 Objective with Camera
- Siemens Clinitek Advantus with printer for urinalysis
- Beckman Coulter LH500 Hematology analyzer
- Siemens Integrated Dimension EXL 200 for Chemistry and Immunology (capable of Toxicology Testing) (reagent rental)
- Siemens CS2500 for Coagulation (reagent rental)
- Siemens DCA Vantage (backup)
- 2 Hemochron Signature Elite Coagulation analyzers (back-up)
- Perkin Elmer Victor X3 MicroPlate Reader
The asking price of this lab with the scope described above is at $2.4 M dollars. 50% to be given at the time of signing the agreement and balance 50% kept in an escrow and paid at the successful completion of PA inspection.
Other capabilities (Pharmacogenomics, Toxicology confirmation) etc. can be added at an extra price. The seller has regulatory experience and can help file for other insurances and for certification for other states at an additional negotiated price.