Surgeon Group’s Lawsuit for Pre-Closing Surgery Reimbursement in M&A Case


Explore a recent M&A case where a surgeon group filed a lawsuit over reimbursement for surgeries performed before a business acquisition. Learn about the legal proceedings, magistrate’s recommendation, and the importance of clear liability allocations. Case reference: AA Medical, PC v. Centene Corporation.

M&A Stories

August 30, 2023


In a recent M&A case, a surgeon group has taken legal action against a buyer regarding reimbursement for surgeries performed prior to the business acquisition’s completion.


In this situation, a health insurance company purchased the assets of another health insurer, which included a contract with a surgeon group in New York. The surgeon group had conducted surgeries for various patients before the official acquisition took place. Subsequently, the surgeons sought reimbursement from the purchasing health insurer as per their provider contract. However, the buyer declined to honor this request.

Legal Proceedings:

The surgeon group filed a lawsuit against the buyer in a federal district court in Brooklyn. The buyer, seeking a swift resolution, asked the court to dismiss the claim that they had assumed responsibility under the provider contract for covering surgeries performed prior to the acquisition. The judge decided to involve a federal magistrate to obtain a recommendation on the case.

Magistrate’s Recommendation and Outcome:

Following a thorough review, the federal magistrate suggested that the judge rule in favor of the buyer. This recommendation was because the asset purchase agreement clearly indicated that the seller bore the responsibility for covering surgeries conducted before the official acquisition.

Importance of Clear Allocations:

In asset-based transactions like these, it’s crucial to precisely outline the allocation of liabilities that the seller retains prior to the closing. Well-defined allocations play a significant role in minimizing the potential for legal disputes after the deal has been finalized.

Case Reference:

See AA Medical, PC v. Centene Corporation, No. 21-CV-5363 (JS) (ST), United States District Court, E.D. New York (June 30, 2023).

By John McCauley: I write about recent legal problems of buyers and sellers of small businesses.



Telephone:      714 273-6291


Check out my books: Buying Assets of a Small Business: Problems Taken From Recent Legal Battles and Selling Assets of a Small Business: Problems Taken From Recent Legal Battles

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