Selling, buying, or expanding an ABA practice in Louisiana: the license, the records, and the deal

Change of ownership: equity versus asset in Louisiana

Louisiana's equity-versus-asset decision turns on Medicaid enrollment and managed care credentialing.

• Equity sale. The buyer acquires the entity, which keeps its Medicaid enrollment subject to ownership disclosure, its managed care organization contracts, and its employment of the licensed professionals. The supervising licensed behavior analyst, psychologist, or medical psychologist continues with the entity.
• Asset sale. The buyer takes assets but not the entity, so the buyer must hold its own Medicaid enrollment and complete credentialing with each managed care organization before billing, and must employ the licensed professionals afresh; the manual's transition-of-services standard governs how the records move.
• The practical consequence. Louisiana favors equity structures because they preserve enrollment and the managed care contracts; an asset deal is planned around the credentialing timelines and the transition-of-services standard.

The first question in a Louisiana deal is how much of the caseload is managed care Medicaid, because that decides how many credentialing cycles an asset deal must survive.

No license strands and no transaction notice applies

Louisiana licenses behavior analysts under R.S. 37:3701 and following through the Louisiana Behavior Analyst Board, as the Louisiana licensing page explains; the license follows the clinician, and the statute is subject to sunset review in 2028. The Behavioral Health Services Provider license does not reach ABA, which is covered under its own Medicaid chapter, as the Louisiana facility page covers, so nothing strands. No Louisiana health care transaction notice statute was identified at the last check, so a Louisiana ABA sale carries no state pre-closing notice of the kind Massachusetts or Indiana imposes; the structure and the calendar are the parties' to set, subject to Medicaid change-of-ownership disclosure (R.S. 37:3701 et seq.; R.S. 37:3705; Louisiana Medicaid Services Manual ch. 4).

Expanding into Louisiana: enrollment and MCO credentialing

For an out-of-state operator, Louisiana entry is a credentialing exercise:

• Register or form. The operator registers the home-state entity or forms a Louisiana entity; the professional entity is ordinary and ownership is open.
• Credential and enroll. Analysts hold Louisiana Behavior Analyst Board licenses; the entity enrolls with Medicaid and credentials with each managed care organization; a supervising psychologist or medical psychologist may be added for the diagnostics archetype.
• No transaction notice. Entry by acquisition carries no state pre-closing notice found to apply.

The practical rule for entry is that Louisiana is a credentialing state with a specific records-continuity standard and a specific non-compete statute.

Ownership restructuring on entry

Louisiana's professional entity is ordinary and ownership is open, as the Louisiana ownership page and the Louisiana entity page explain. The transaction point is that the Medicaid ABA manual places the supervising and records duties on the licensed professional, so a management company's role is structured to leave the licensed professional in control of supervision and records, and ownership disclosures on the Medicaid enrollment must match the post-closing structure.

Medicaid re-enrollment and the supervising professional

Medicaid enrollment is personal to the enrolled provider; an equity change is disclosed and an asset buyer enrolls and credentials in its own right before billing, with the change-of-ownership mechanics to be confirmed. The ABA manual requires prior authorization by the managed care organization, reassessment at least every six months, and an authorization period no longer than 180 days (Louisiana Medicaid Services Manual ch. 4).

• The practice with in-house diagnostics. A licensed psychologist or medical psychologist may supervise ABA services and participate in the diagnostic evaluation; the individual's license and enrollment follow the person, so the diagnostic path is a retention item.
• The ABA-only practice. Its licensed behavior analyst supervises, diagnoses come from outside, and the buyer inherits referral relationships.

The Louisiana Medicaid page covers the supervision ratios and the authorization cycle.

Records custody on a transfer: transition of services

Client records must remain with a custodian bound by the ABA manual, which frames retention as a continuity duty.

The transition-of-services standard means a buyer inherits not just files but a duty to keep them in a form that lets another provider pick up a client without a gap, which is a diligence point in an asset deal where clients move to the buyer's entity. The manual also requires start and stop times and credentialed daily signatures for every billed session, so a chart that lacks them will not support the claim in an audit. The Behavior Analyst Board's own records rule and the psychology board's rule were not re-read for this page and should be confirmed. In an equity sale the records stay with the entity; in an asset sale, custody must be specifically addressed so a licensed professional remains custodian, the transition-of-services standard is met for every active client, and the sixty-day breach clock with its Attorney General reasons is allocated. The Louisiana facility page covers the breach statute and the documentation rules (Louisiana Medicaid Services Manual ch. 4; La. R.S. 51:3074).

Non-compete enforceability under R.S. 23:921

Louisiana regulates non-competes by statute, and the statute is unusually specific about geography and time.

Verbatim, La. R.S. 23:921(C)Any person, including a corporation and the individual shareholders of such corporation, who is employed as an agent, servant, or employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of the employer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment.
• The employee exception. Subsection (C) permits an employee covenant that restrains the employee from carrying on a similar business in a specified parish or parishes, or municipality or municipalities, or parts thereof, in which the employer carries on a like business, for up to two years from termination. A covenant that fails to name the geography, or that exceeds two years, is void, and Louisiana courts historically construe the statute strictly and do not reform an overbroad covenant.
• The sale-of-business exception. Subsection (B) permits one who sells the goodwill of a business to agree to refrain from a similar business in the specified parishes or municipalities so long as the buyer carries on a like business, for up to two years from the sale.
• The practical consequence. Selling owners are bound through the sale-of-business exception with the parishes named and a two-year cap; clinician covenants must name the parishes served and stay within two years; a covenant drafted for another state's reasonableness standard will likely be void in Louisiana (La. R.S. 23:921(A), (B), (C)).

The practical rule is to draft every Louisiana covenant to R.S. 23:921's parish-specification and two-year requirements, and not to rely on a generic reasonableness clause, with counsel confirming the current text.

Diligence flags specific to Louisiana

The state-neutral diligence workstreams are covered in the ABA due diligence playbook. The items that change specifically in Louisiana are:

• Enrollment and MCO credentialing. Confirm a clean Medicaid enrollment and each managed care organization contract; plan the buyer's own enrollment and credentialing for an asset deal.
• Transition-of-services readiness. Confirm records are kept so clients can transition without a gap, and that charts carry start and stop times and credentialed signatures.
• Supervising professional. Identify the licensed behavior analyst, psychologist, or medical psychologist supervising the caseload and confirm intent to stay.
• Covenant compliance. Confirm every covenant names the parishes served and stays within two years under R.S. 23:921; a non-compliant covenant is void.
• Breach procedure. Confirm incident response to sixty days with written reasons to the Attorney General for any delay.

Reading the Louisiana transaction friction

Putting the pieces together, Louisiana is a light-to-moderate friction state. No license strands, no transaction notice applies, ownership is open, and the entity is ordinary. The friction is Medicaid enrollment and managed care credentialing that rebuild in an asset deal, a records duty framed as transition-of-services continuity, and a non-compete statute that voids any covenant not drafted to its parish-specification and two-year rules. The archetype decision shows up in the supervising professional, who may be a psychologist or medical psychologist in the diagnostics archetype. None of this is legal, tax, or financial advice; it is the structure you would plan around with counsel and advisors.

How this connects to the rest of your compliance stack

This transaction page pulls together threads from across the guide:

• Facility and Medicaid. The BHSP license that does not reach ABA, the transition-of-services records standard, and the sixty-day breach clock are on the facility page; the supervision and authorization rules are on the Medicaid page. See the Louisiana facility-licensure page and the Louisiana Medicaid page.
• Licensing and credentialing. The title-protection statute, its 2028 sunset, and the license are on the licensing page. See the Louisiana licensing page.
• Ownership and entity. Open ownership and the ordinary entity are on the ownership and entity pages. See the Louisiana ownership page and the Louisiana entity page.
• The state-neutral deal mechanics. Diligence, deal structures, private equity, expansion, and wind-down are covered on the spoke's concept pages, linked below.

Sequencing a Louisiana deal or expansion

1. Choose the structure. Prefer equity to preserve Medicaid enrollment and managed care contracts; for an asset deal, complete the buyer's enrollment and credentialing before closing.
2. Confirm transition readiness. Verify records are kept so clients can transition without a gap and that charts carry start and stop times and credentialed signatures.
3. Identify the supervising professional. Confirm the licensed behavior analyst, psychologist, or medical psychologist supervising the caseload and their intent to stay.
4. Draft covenants to R.S. 23:921. Name the parishes served, cap at two years, and do not rely on a generic reasonableness clause; use the sale-of-business exception for sellers.
5. Allocate the breach step. Write the sixty-day clock and the Attorney General reasons into the incident plan and the agreement.
6. Confirm ownership disclosures. Match the Medicaid ownership disclosures to the post-closing structure.

Louisiana transaction variables at a glance

Frequently asked questions