ABA acquisition target screening should decide whether a candidate deserves full diligence, not whether it is safe to buy. Use a short, consistent evidence packet to test strategic fit, care model, authority, clinical leadership, payer concentration, workforce stability, record and billing signals, cash needs, integration burden, and competition concerns. Record unknowns as unknown, apply written stop conditions, and keep screening scores separate from valuation and final approval.

Separate screening from diligence

Celeste uses a two-stage process. Screening answers whether to spend time and grant deeper access. Diligence tests the actual transaction. A passing screen does not validate representations, clinical quality, compliance, revenue, valuation, authority, payer transfer, or integration. The SBA buying guide recommends examining contracts, leases, cash flow, licenses, permits, financial statements, and tax records with attorney and accountant support. Those are later diligence domains, not evidence that a target has already passed.

Set the acquisition thesis and exclusion rules first

Define the desired geography, service, setting, size, client population, payer mix, leadership model, cultural requirements, integration capacity, capital range, and timeline. Exclusion rules can cover unavailable clinical leadership, unresolved ownership authority, unacceptable client-safety signals, prohibited transaction structures, inability to support accessible services, unmanageable payer concentration, or cash exposure beyond the approved limit. Apply the rules before seeing a preferred target's headline growth.

Request a minimum screening packet

Ask for entity and ownership outline, locations and service mix, current licenses and certifications, leadership roster, workforce counts, payer and revenue concentration, high-level claims and collection trends, client and referral counts with definitions, material incidents and complaints, major contracts and leases, litigation and audit disclosures, systems, and requested transaction structure. Use de-identified or aggregate information at screening whenever it can answer the question. Confidentiality and privacy owners approve access.

Screen clinical and organizational fit

The CASP public organizational overview describes broad business, clinical-operations, and risk-management areas. The buyer's screen should ask who owns clinical standards, case decisions, supervision, incidents, communication access, family involvement, documentation, outcome review, and corrective action. The public CASP page does not prescribe the screen or endorse a target.

Look for concentration and integration risk

Measure revenue and client exposure by payer, site, service, clinician, referral source, and month. Identify founder-only relationships, one-person billing knowledge, key lease or vendor dependencies, incompatible systems, unsettled refunds, and open authorizations. A strong companywide average can hide one payer or site that determines the deal's cash and continuity risk.

Route competition questions before information sharing expands

The 2023 Merger Guidelines remain the federal agencies' current merger-enforcement framework and create no independent rights or obligations. They consider competition for customers, workers, suppliers, and providers, plus partial ownership and serial acquisitions. Counsel should define the relevant markets, clean-team or information-sharing controls, and any filing analysis before competitors exchange sensitive operational data.

Test the quality of the screening packet

For every headline number, ask who produced it, from which system, for what entity and period, using which definition, and whether it reconciles to another record. Distinguish scheduled hours from delivered service, billed claims from adjudicated claims, deposits from recognized revenue, active employees from credentialed and assignable staff, and total clients from active clinically appropriate cases. Record missing months, manual adjustments, owner-created spreadsheets, and changes in definitions.

Use a small number of cross-checks rather than trying to perform diligence early. Compare site lists across leases, payer rosters, insurance, and financial statements. Reconcile a recent payroll total to the workforce roster and general ledger. Compare payer concentration using both claim and cash views. Trace a few deidentified or appropriately controlled service records through authorization and remittance only if counsel and privacy owners approve the route. A failed cross-check becomes a diligence question or stop condition, not proof of wrongdoing.

Protect both practices from premature commitments

Define what the buyer may say to the target, its workforce, referral sources, payers, clients, and vendors during screening. Limit contact to authorized people and preserve ordinary-course decision rights. Avoid promising employment, directing clinical or business operations, sharing future pricing or workforce strategy, or suggesting that the transaction is approved. Questions that require sensitive information should move to counsel-controlled diligence rather than expanding an informal screen.

Set a screening budget, expiration date, and decision meeting. At that point the buyer advances, stops, or requests a narrowly defined repair packet. A target that advances receives a written diligence scope, access rules, responsible contacts, and the next gate. A stopped target receives the agreed disposition and access removal. This keeps commercial enthusiasm from creating an uncontrolled shadow integration while material facts are still unknown.

Use a red-flag log instead of a single score

A composite score can let strong growth offset a disqualifying authority or safety issue. Celeste records each criterion as supported, contradicted, unknown, or inapplicable, with source date, owner, materiality, follow-up, and stop effect. She also records who supplied the information and whether it was independently confirmed. Unknown items remain visible when the candidate advances.

Work through a fictional screen

Celeste screens sixteen fictional target-location combinations under the same cutoff. Five meet every threshold for strategic fit, clinical leadership, payer concentration, workforce, compliance disclosure, cash range, and integration capacity. Seven need bounded follow-up, and four hit stop conditions. Two follow-up cases later advance. The screen reports 5 of 16, or 31.3% initially eligible and preserves every disposition.

Carry the screen into diligence without copying conclusions

When a target advances, convert each supported, contradicted, and unknown item into a diligence request or test. Recheck the source period, definition, sample, and responsible person. Do not label screening data as verified diligence evidence. The OIG General Compliance Program Guidance is voluntary and nonbinding; its risk-assessment and auditing concepts can help prioritize work without certifying compliance.

Document the decision to advance or stop

The decision memo states the acquisition thesis, screen date, evidence packet, material unknowns, competition and confidentiality controls, proposed diligence scope, budget, owners, and next stop point. The SBA merger and acquisition page recommends a written sales agreement and qualified legal review later in the process. Screening should avoid commercial momentum that outruns authority, evidence, or counsel.

Questions at the advance gate

  • Does the target fit the buyer's documented care model, geography, capital range, and integration capacity?
  • Are entity, ownership, site, service, payer, workforce, and financial definitions clear enough to request diligence intelligently?
  • Which facts were independently cross-checked, contradicted, unavailable, or supplied only by management?
  • Do any clinical, continuity, privacy, competition, authority, or liquidity concerns require a stop or counsel-controlled route?
  • What information may the buyer receive next, through which people and controls?
  • Which screening unknowns become diligence workstreams, and what evidence would close them?
  • What budget, duration, exclusivity assumption, and next stop point govern the investigation?

The committee should record a direct answer to each question. An advance decision means the defined diligence work is justified; it does not validate the target, valuation, transaction, or future integration.

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