Gauge Capital has announced it has invested in East Coast Institute for Research (ECIR).

ECIR, founded in 2007 and based in Jacksonville, Fla., is a clinical research site management organization focused primarily on the cardiovascular and metabolic therapeutic areas. The company has sites across northern Florida and Georgia.

Gauge, based in Southlake, Texas, is a middle market private equity firm that invests in healthcare and other sectors. Founded in 2013, Gauge typically commits $20 million to $100 million in each platform investment and targets companies with $5 million to $40 million in EBITDA.

Terms of the investment were not disclosed.

After an active 2022, this year has seen a shift in the professional practice model space, with new challenges around the cost of capital, pricing and labor. Some who raised a lot of capital in 2022 will still be looking for deals, while others will focus on valuation and financial performance.

On this episode of The Corner Series, McGuireWoods’ Geoff Cockrell sits down with Robert Aprill, managing director at Physician Growth Partners, to discuss how the market might evolve in 2023 and beyond.

The aftermath of COVID-19 led many business owners to reevaluate the importance of size and scale in their operations, leaving them more open to partnering with larger entities. In private equity, an adviser’s role is to educate clients about compensation and alignment options when considering partnerships with healthcare platforms. The focus is on ensuring that physicians are partners and are compensated based on performance, promoting alignment through incentives rather than punitive measures like production thresholds.

“We spend a lot of time with our clients. I think oftentimes with us, we’re presenting something versus having buyers present something to us,” explains Robert.

The episode also covers areas of consolidation, interest in niche specialties, and aligning equity with compensation.

GTCR has announced it will acquire Cloudbreak Health from UpHealth for $180 million.

Cloudbreak, based in Columbus, Ohio, is a provider of healthcare-focused language interpretation services. Founded in 2003, the company’s core offering is Martti (My Accessible Real-Time Trusted Interpreter), a video remote interpretation solution designed to connect patients with interpreters in over 250 languages.

GTCR, based in Chicago, pursues a wide range of investments in several industries, including healthcare. Founded in 1980, the firm prefers to make more substantial investments from a dollars perspective.

The transaction is expected to close in the first quarter of 2024.

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are continuing our series of profiling women leaders in private equity. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. We are pleased to feature Michelle Fang Jordan is a principal at Athyrium Capital Management. Access her profile.

To recommend a woman for a future interview, email Amber Walsh at

On this episode of The Corner Series, McGuireWoods’ Geoff Cockrell invites Alessio Baraldi, managing director at Albaron Partners, to discuss value creation in healthcare provider services. Alessio provides insight into the equity structures that work best for his portfolios and how he approaches compensation to keep everyone aligned.

“In an environment where there is quite a bit of wage inflation, having a unified system where the management team is able to manage expenses at the center level without relying on the doctors making those calls, has been quite helpful,” Alessio says.

Value creation from a growth strategy can be quite effective, and firms use various approaches such as de novo or acquisitions. Alessio and Albaron Partners prefer a mixture of both to add the most value to their partners. Integrations and centralization also provide value to a portfolio company. Being well-integrated and centralizing support functions like billing and call centers can help a company adapt to wage inflation while increasing operational efficiency.

Thoma Bravo has completed its acquisition of NextGen Healthcare, according to a news release.

NextGen, founded in 1994 and based in Atlanta, is a provider of healthcare software services.

Thoma Bravo paid $23.95 for each NextGen share in a transaction valued at approximately $1.8 billion. NextGen has now become a privately held company.

Thoma Bravo, with offices in Chicago and San Francisco, is a private equity investment firm focused on investing in software and technology businesses, including healthcare information technology companies.

The difficulties faced by healthcare provider consolidations could be temporary or they could indicate a long-term decline in the attractiveness of consolidation. Some challenges, like high debt and labor market imbalances, are temporary and don’t reflect the fundamental quality of the businesses involved.

On this episode of The Corner Series, McGuireWoods’ Geoff Cockrell is joined by Mark Francis, managing director and global head of healthcare investment banking at Houlihan Lokey. The two discuss the future of healthcare provider consolidations through the lens of those working in the industry right now.

Mark and Geoff talk about the future of healthcare provider consolidations through the lens of those working in the industry. Over the past six to eight months, some larger platforms that were acquiring smaller companies paused their acquisition activities due to a disconnect between seller expectations and current valuations. They also were waiting for more favorable credit conditions and pricing adjustments. Now, these platforms are beginning to look to the market again to see what is available.

Mark and Geoff also discuss the healthcare sector’s resilience during economic slowdowns. Healthcare often is less volatile than other sectors, making it an attractive option for investors looking to allocate funds during economic uncertainties. Healthcare is a mature market, but new interest in private equity has led to a reshuffling of focus within sectors. Some sectors such as healthcare technology, veterinary care and behavioral health remain highly attractive despite varying trends in their valuations.

In addition, Mark and Geoff address valuations and the importance of running and operating integrated businesses. “Great companies get great valuations, and we can debate what great is, but if people don’t feel good about the valuations, largely they’re not trading,” Mark says.

The interview below is part of a McGuireWoods series featuring interviews with C-suite leadership of private equity-backed portfolio companies. To recommend a leader for a future interview, email Holly Buckley at or Tim Fry at

Q: How do you ensure the platform’s organizational culture is appropriately conveyed to potential targets?

Rich Goode: The main way is by involving our physicians in our merger and acquisition process. We feel it’s important to have a few in-person meetings with targets before we go any further with the process. During these meetings, we’re able to interact and get to know one another a bit and let the people we’re meeting see doctors from our other geographies. We’re trying to understand their culture and get them to know ours as well.

The single biggest thing we look at when we’re considering a target is whether there’s going to be a good cultural fit. That’s important for our physicians and our management team, and I think it’s one of the things that differentiates us from other organizations. We’ve been willing to pass on numerous opportunities because we didn’t feel like they were a good fit.

Harvest Partners has announced it has closed its latest fund with $5.34 billion of commitments.

The new fund, Harvest Partners IX, surpassed its target of $5.25 billion.

Harvest, based in New York, is a PE firm investing in middle-market companies generating between $100 million and $3 billion in revenue. Founded in 1981, the firm targets investments in healthcare services and a few other industries.

On Oct. 13, 2023, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 23-07 approving a multispecialty physician practice’s proposal to pay bonuses to each of its employed physicians based on net profits derived from the facility fee generated by procedures the physician performed at the practice’s ambulatory surgery center (ASC).

The advisory opinion indicates that OIG views the bona fide employee protections under the federal Anti-Kickback Statute (AKS) very broadly, protecting compensation based on revenue streams that previously may have been deemed to fall outside the safe harbor’s protection.

OIG concluded that the proposed arrangement would not implicate the AKS because the arrangement met the bona fide employee statutory exception and regulatory safe harbor to the AKS. As with all OIG advisory opinions, OIG’s conclusions apply only to the proposed arrangement and cannot be relied upon by persons other than requester. Further, this advisory opinion focuses on the employment status of the bonus recipients but does not directly address how the OIG would view similar compensatory payments to practice physician owners, situations when the ASC is a separate legal entity, or similar payments structured as distributions. It is, however, informative for those evaluating similar physician compensation arrangements.


Advisory opinion 23-07 addresses an arrangement where a multispecialty physician practice requester (the practice) with approximately 11 physician employees operates two ASCs, each as a corporate division within the same legal entity as the practice. As proposed, the practice would provide a compensatory bonus to the physician employees who performed outpatient surgical procedures at either of two ASCs, in the form of 30% of the practice’s net profits from the ASC’s facility fee collections attributable to that physician employee’s procedures performed at the ASC.

Under the AKS, OIG concluded that the bonus compensation is protected by the statutory exception and regulatory safe harbor for bona fide employees. Specifically, OIG found that the bonus compensation would constitute an amount paid “by an employer to an employee for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid, or other Federal health care programs.”

OIG noted that similar arrangements involving bonus payments to independent contractor physicians or other nonemployees or under a different corporate structure could still implicate the AKS despite this advisory opinion. OIG specifically noted that it expressed no opinions on any ownership distributions provided by the practice (that is, compensation to the practice owners), specifically relying on the practice’s certification that all recipients of the proposed bonus were bona fide employees as defined in the Tax Code. OIG also specifically noted that, in the proposed arrangement, the ASCs were not separate legal subsidiaries of the practice, and it expressed no opinion on whether the reorganization of the practice (to, for example, make each ASC its own distinct legal subsidiary) would impact the analysis. The advisory opinion did not discuss whether a similar arrangement wherein a physician practice has an ownership interest in an ASC (and runs those distributions from such ASC through its compensation model) would be protected.

However, OIG specifically indicated that if the physicians were owners of an ASC and paid themselves bonuses in the form of ownership distributions, then this could raise fraud and abuse concerns, as payment structures that tie compensation to profits generated from services furnished to patients referred by the compensated party may violate the AKS.


The advisory opinion provides direction to practices with ASC divisions inside the same legal entity practice hoping to offer different ways to compensate employed physicians. However, the OIG provided examples of other arrangements that would not meet the same safe harbor and exception, which will require further analysis. In addition, the advisory opinion did not review this arrangement in connection to the Stark Law — i.e., the federal physician self-referral prohibition — because the requestor certified that it would not furnish any “designated health services.” Thus, it is important to exercise caution and to construct appropriate safeguards when structuring compensation methodologies that relate to profits from services performed by physicians.

McGuireWoods has extensive experience assisting clients with similar state healthcare transaction restrictions. McGuireWoods’ integrated healthcare transactions team — which brings together regulatory and corporate expertise — has significant experience navigating AKS concerns. In addition, team lawyers closely track guidance and developments in this area for purposes of providing clients with informed strategic advice. Please contact one of the authors for additional information on this advisory opinion or other related compliance concerns.