Transition Service Agreement
Transition Service Agreements (TSA),for assisted living facility, are used to improve deal results or business outcomes. Nursing & Behavioral Health Services (NBHS) providescustom TSAs for businesses such as assisted living facilities, home care agencies, adult day programs, group homes, and more.
A Transition Service Agreement for assisted living facility is an agreement between a personal care business buyer and seller, whereby the seller contracts with the buyer to render its services and know-how, for a specified period of time, in order to facilitate and to allow the buyer to adjust and learn the environment of its newly acquired assets, program, residents, employees, systems, etc.
What should the length of a TSA be? A TSA can be short, if the services being provided are not extensive. For instance, if the new company only needs administrative help, the agreement could be fairly simple and short. It would detail the time frame when services are to be provided, along with rates going forward after this period (if this is required). Many of these agreements also contain clauses,which state that there are no formal performance standards for the selling company.However, in cases whereby license requirements and certifications are at stake, as is the case with a personal care business – the TSA is likely to be lengthy and involve performance standards.
If the services being requested are more complex, the resulting assisted living facility transitional service agreement will definitely be considerablymore complex. If the buying company requires the help of many different industry experts, company resources, or third-party vendors to get on their feet or to keep the company operational, the agreement could contain provisions for different service levels and variable fees.
So, what should an assisted living facility transition service agreement contain? It should include the scope of work being offered, along with requirements for privacy and data security; record access, third party vendor, as well as payee identification and access. Make no mistake, this is a very important document and not everyone can get this part done correctly (especially lawyers). Many lawyers fail to understand the inside workings of residential facilities that is needed to even write the agreement thoroughly and effectively, on first try. This is not a stab at lawyers, but most lawyers don’t have a background in licensing, certifying, billing, accreditation, and running the day-to-day affairs of personal care businesses such as assisted living facilities, DD group homes, home, and companion care agencies, or adult day programs. This knowledge is critical to writing an effective assisted living transitional service agreement,especially one that is air tight, and with teeth that hold the other parties to their obligations and prevents them from running off with the check and leaving the purchaser high and dry.
What are a TSA benefits?A transitional service agreement can become unwieldy to enforce and manage if it is not created correctly, and with clear objectives. A common issue is when the scope of services provided is not well defined. This tends to result in disputes between the owners of the two companies as to what services are owed, and what servicesare to be rendered. When written properly, an assisted living facility transitional service agreement can offer a variety of essential benefits including:
- Clear understanding between buyer and seller
- Less headaches
- A clean & smooth separation
- Less errors and costs
- Holds key parties accountable
NBHS specialize in writing assisted living facility transition service agreements and TSAs for a plethora of other personal care business models. In fact, we have written hundreds of agreements in many different states and our team can help make your purchase and transition significantly smoother and more secure. Typically,we start with a consultation, to get familiar with your team and TSA requirements and then proceed to the contract phase.