How PE finds physician group bolt-on targets
A real OB/GYN case study. Five states, four filters, three minutes, one qualified target. A look at how bolt-on sourcing actually works today, why the funnel is narrower than most platforms assume, and what comes back when the whole screen runs in one conversation.
The setup
Physician practice rollups are the other half of healthcare PE. Behind every platform investment in a specialty (dermatology, ophthalmology, women's health, orthopedics, GI, urology) sits a pipeline of bolt-on targets that have to be sourced, qualified, and priced. For a mature platform, bolt-ons drive most of the returns. The platform LBO is the chassis. The bolt-ons are the compounding engine.
A mid-market women's health platform, say one that closed its platform deal 18 months ago, will be looking at two to four bolt-ons a month. Some come inbound from bankers. Most are sourced directly by the corp dev team. The thesis is usually specific: groups of a certain size, in a specific set of MSAs, with a single-TIN structure, commercial payer mix above some threshold, and no known compliance issues.
The sourcing problem is the same every time. The target universe is fragmented across every county in the country. There is no single list. Everyone has to build their own.
The screen
Take a realistic bolt-on screen for a women's health platform actively rolling up in the midwest and southeast:
Bolt-on qualification criteria
- Geography. OH, IN, TN, WI, GA. States where the platform already has presence or has announced expansion intent.
- Specialty. OB/GYN, or multi-specialty groups with OB/GYN as the dominant line.
- Scale. Three or more physicians. Under three is a lifestyle practice, not an acquisition target.
- Revenue. $1.5M or more in Medicare-allowed amounts. A floor that correlates with $8M-$12M total revenue depending on payer mix.
- Compliance. No open enforcement flags. No LEIE exclusions, no recent state board discipline, no open qui tam.
- Ownership. Single-TIN structure. Already-consolidated or partially rolled-up groups are harder to diligence and usually already talking to another buyer.
Six filters, five states, one specialty. Every one of those filters lives in a different dataset. Every one of those datasets has its own access model, its own update cadence, and its own quirks.
How it's done today
The typical corp dev workflow runs through four or five tools. Each one answers part of the question. None of them answers all of it.
Definitive Healthcare
~$150K / yearProvider database with specialty, volume, and group affiliations. The usual starting point. Definitive maps NPIs to groups, but the group definition is assembled, not authoritative, and ownership structure has to be confirmed elsewhere.
IQVIA / Symphony
~$200K+ / yearClaims-derived volumes and share-of-wallet. Rich data if you can afford it. Most mid-market PE shops can't justify the cost for a sourcing workflow.
Levin Associates
~$15K / yearNewsletter and deal database. Good for tracking what's already been announced. Not a sourcing tool in the forward-looking sense.
Medicare Part B PUF
Free, but rawCMS-published provider-level utilization. Answers the revenue question directly. Distributed as 10M-row annual CSV files. Someone has to ingest and join them.
State Medicaid provider files
Free, but scatteredEach state publishes its own enrolled-provider file in its own format. Useful for state-by-state ownership and TIN confirmation. Nobody pulls them.
Exclusion & compliance sources
Free, but 100+ sourcesOIG LEIE, SAM.gov, 50 state medical boards, FDA debarment, NPDB, state Medicaid exclusion lists. Checking each one by hand for a 300-target pipeline is not realistic.
The realistic workflow is a Definitive export, filtered in Excel, cross-referenced against Medicare PUF (if someone on the team knows how to join on NPI), and then a manual pass through OIG LEIE and the relevant state boards for the names that survive. Compliance usually gets skipped until post-LOI.
A corp dev associate who does this well can produce a qualified target list for one specialty in one region in about two weeks. Most don't do it well. Most start from a banker-sourced list and work backwards.
The query
Same screen, one conversation. Typed into Claude with the Medistill connector attached:
You type
“Find every OB/GYN practice in Ohio, Indiana, Tennessee, Wisconsin, and Georgia with 3+ physicians, $1.5M+ Medicare billing, no open compliance flags, single-TIN ownership structure. Rank by size.”
What Medistill does under the hood
- Queries the physician group screener (40K physician groups with rollups from CMS Physician Compare and Medicare Part B PUF) for the five-state geography.
- Filters on dominant specialty = OB/GYN and on modal location within each group.
- Applies the 3+ provider, $1.5M+ allowed amount, and single-TIN structure filters.
- Screens every NPI and the group entity against 115 compliance sources: OIG LEIE, SAM.gov, state medical boards, NPDB Public Use File, FDA debarment, Medicare opt-out, DOJ False Claims Act settlements, CMS CIAs, state Medicaid exclusion lists, NLRB charges, HRSA 340B audit findings, and the rest.
- Separates enforcement-grade flags from disclosure-grade flags (Open Payments disclosures above thresholds are not sanctions).
- Returns a ranked list with full diligence context per group.
End to end: three minutes. Every number is sourced and queryable for follow-up.
The result
One group clears every filter strictly. A multi-specialty group in central Ohio, 44 OB/GYN providers attached to a single TIN, 78 unique billing NPIs when you include the ancillary specialties, $2.34M in Medicare-allowed amounts in the most recent complete year.
Strict-match target profile
The eight Open Payments hits are disclosures, not sanctions. Industry payments above the $5K threshold get reported to CMS by law and show up as public records. They're worth knowing about, but they're not reasons to pass. A clean practice is not a practice with zero industry ties. It's a practice with zero enforcement actions.
That distinction is the reason Medistill separates the two tiers. An associate running the LEIE by hand might conflate them. A buyer who conflates them will pass on too many qualified groups.
Why only one
The interesting part of this screen is the strictness, not the match. One qualified target across five states is tight. That's not a data coverage problem. That's the specialty.
OB/GYN Medicare billing has a structural ceiling. Most obstetric patients are under 65. Medicare allowed amounts for a pure OB/GYN group are usually in the $200K-$900K range, not the $1.5M-plus range that cardiology or GI would hit at the same headcount. A $1.5M Medicare floor, applied to OB/GYN, selects for multi-specialty groups where OB/GYN is the largest line but not the only one.
That's a useful thing to learn in three minutes, because it redirects the screen. If the platform's real criterion is economic scale, the right cut is total revenue or commercial payer volume, not Medicare. If the real criterion is breadth of women's health services, the right cut is multi-specialty with OB/GYN share above some threshold. Either way, the filter needs to be adjusted.
The near-misses matter as much as the match. Groups that cleared four of five filters. Groups that had single-TIN structure and scale but were 30% OB/GYN instead of the dominant line. Groups in Indiana with five providers and $1.1M Medicare. Every one of those is a conversation about how the screen is defined, not a dead end.
Relaxing the filters
The follow-ups look like this, in the same conversation:
- Drop the Medicare floor to $500K. Returns the universe of pure OB/GYN groups that were excluded by the $1.5M ceiling. Different list. Different thesis.
- Accept OB/GYN-heavy multi-specialty at 15%+. Surfaces the groups where OB/GYN is a major line but not dominant. Common structure in secondary metros.
- Expand geography to contiguous states. KY, MI, PA, AL. Platform mapping exercise, one query.
- Layer in payer mix. Cross-reference against the hospital-side price transparency data to approximate commercial book for groups that refer to local hospitals. Rough, but directional.
Each of those runs in under a minute. The context carries across the conversation. The tool re-queries. The list reshapes.
What this unlocks for corp dev
The same sourcing workflow, today versus through Medistill:
Today
With Medistill
The real unlock isn't cost, it's iteration speed. A corp dev team that can test a new thesis in five minutes instead of two weeks stops defending the list they already built. Geography expands, specialty sub-cuts get explored, the compliance floor gets lowered or raised to see what moves.
A platform that's doing two to four bolt-ons a month is usually working a pipeline of 200 to 400 warm targets. Keeping that pipeline fresh, re-screening every quarter as compliance data and billing data update, is the work that doesn't get done today because nobody has time. It gets done when the screen is a conversation.
FAQ
Questions corp dev teams ask before they run their first bolt-on screen through Medistill.
How do healthcare PE platforms source physician group bolt-on targets?+
Most mid-market platforms stitch together Definitive Healthcare for provider lists, Medicare Part B Public Use Files for billing volume, Levin Associates for announced deals, and per-state Medicaid enrollment and medical board portals for ownership and compliance. A qualified target list for one specialty in one region typically takes a corp dev associate one to two weeks to produce.
What filters matter in a bolt-on screen for a physician group?+
Six filters cover the realistic screen: geography (target MSAs), specialty or dominant specialty, scale (three or more physicians), revenue floor (often $1.5M+ in Medicare allowed amounts), clean compliance (no LEIE, SAM, or state board flags), and ownership structure (single-TIN preferred over already-consolidated groups).
Why do so few OB/GYN practices clear a $1.5M Medicare billing floor?+
OB/GYN Medicare has a structural ceiling because most obstetric patients are under 65. A pure OB/GYN group usually bills $200K to $900K in Medicare allowed amounts regardless of headcount. A $1.5M Medicare floor effectively selects for multi-specialty groups where OB/GYN is the largest line but not the only one.
Are Open Payments disclosures the same as compliance violations?+
No. CMS Open Payments disclosures above $5K are legally mandated reports of industry financial relationships. They are public records, not sanctions. Enforcement-grade flags (OIG LEIE exclusions, SAM.gov debarments, state medical board discipline, FDA debarment, NPDB adverse actions) are categorically different and should be screened separately.
How long does bolt-on target sourcing take with Medistill?+
A full screen across five states, six filters, and compliance checks against 130+ enforcement sources runs in about three minutes in a single conversation. Follow-up thesis iterations (relaxing filters, expanding geography, layering payer mix) run in under a minute each.
What is a single-TIN physician group and why does it matter for M&A?+
A single-TIN group shares one federal Taxpayer Identification Number across every billing provider. Single-TIN groups are simpler to diligence because financials, compliance, and billing roll up cleanly, and they are less likely to already be consolidated under another PE platform. Multi-TIN structures often indicate prior roll-up activity and a more complex ownership chain.
Run your own screen
The best way to evaluate any sourcing tool is to run your current thesis through it. Pick the specialty, the states, the scale floor, the compliance bar. Ask Medistill to build the list. Compare it to what your team produced the last time they ran the same screen. See what's on your list that isn't on theirs, and what's on theirs that shouldn't be.
Free 50 free credits, full access. If it doesn't replace at least one of your sourcing tools in the first week, don't subscribe.