Is a Statutory Hospital Merger a Bona Fide Sale? Recent Cases Demonstrate that the Deal’s Financial Structure Is Critical

The regulatory status of a statutory merger between hospitals can have significant financial ramifications. As noted in the November 18, 2009, article on this issue, 42 C.F.R. § 413.134(f ) allows realization of gains or losses from the disposition of depreciable assets on a merged entity only if the merger qualifies as bona fide sale. Hospital mergers do not always meet this important criterion.

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