*This article was originally published by Healthcare Business & Technology
Transactions & Regulatory Due Diligence
Our attorneys have significant experience in the structuring and closing of complex corporate transactions in the health care industry. In recent years, we have completed several hundred M&A transactions with multistate providers of health care services.
At Arent Fox, we provide a multidisciplinary team-approach to address all aspects of contract negotiations and transactions, including tax, antitrust, bond financing, labor and employment, benefits, regulatory compliance, government approvals, and real estate. Our experience enables us to identify quickly key business and regulatory issues and facilitate the development of appropriate legal structures for a targeted transaction or relationship. We represent numerous health care entities in mergers, acquisitions, divestitures, and joint ventures. We have vast experience advising clients on how to structure these arrangements to comply with the Anti-kickback Statute, the Stark Law, the False Claims Act, and other federal and state laws governing relationships among health care providers.
We also represent private equity funds and other sources of equity to the health care industry, as well as lenders to public and private businesses that operate skilled nursing, assisted living, continuing care, and retirement and independent living facilities. We represent buyers and sellers of nursing homes, assisted living and independent living facilities, and a variety of ancillary service businesses in hundreds of transactions throughout the country. Our attorneys have years of experience in starting, financing, and growing early stage, venture-backed health care companies. We also advise clients on the regulatory and transactional legal issues faced by companies during accelerating growth.
Our goal in negotiating contracts and transactions is to understand and help our clients reach their business goals while remaining sensitive to compliance with federal fraud and abuse laws, Medicare conditions of participation, and state licensing requirements. For our pharmaceutical and medical device clients, we also handle contracting and other interactions with wholesales, managed care organizations, pharmacy benefits managers, Medicare and Medicare Part D plans, and patient assistance foundations.
In addition, our team conducts health care regulatory due diligence for merger, acquisition, and financing transactions. For acquiring companies, venture capital firms, lenders, and underwriters, we put our regulatory knowledge and extensive investigative experience to work in assessing target companies in a health care context. We look at issues such as licensure, certification, coverage and reimbursement, billing and coding, marketing, and financial relationships with physicians and other referral sources (anti-kickback and Stark law compliance) to evaluate a target’s compliance with applicable laws, rules, and regulations. We identify and assess a target’s regulatory risks and communicate them to clients.
Contracts are everywhere in the health care industry. Our attorneys also have significant experience in the structuring, negotiating, drafting, reviewing, and closing of contracts that arise in the context of health care transactions, vendor arrangements, physician employment, and independent contractor arrangements, managed care, joint ventures, and many other areas. In recent years, we have completed several hundred M&A transactions with multistate providers of health care services.
The Federal Trade Commission (FTC) has proven yet again that antitrust enforcement is alive and well in the health care market. On February 10, 2015, in this most recent win for the federal enforcement agency, the US Court of Appeals for the Ninth Circuit affirmed the FTC’s injunction against St. Luke’s Health System and a large physician group in Idaho. In St. Alphonsus Medical Ctr. – Nampa Inc., et al. v. St.
The Department of Health and Human Services (HHS) announced last week that, over the next four years, it plans to shift half of its traditional fee-for-service Medicare payments to those that create value through better coordinated care. The idea of value-based purchasing is not a new one. Approximately 3,500 hospitals have been receiving bonuses or penalties as part of Medicare’s 10-year effort to link payments to improved quality in the inpatient setting.
In a meeting with almost two dozen health care leaders on January 26, 2015, Health and Human Services (HHS) Secretary Sylvia M. Burwell outlined the clear goals and timelines for moving the Medicare program towards quality-based payments, from quantity or fee-for-service payment models. According to HHS, the purpose of these goals is to ultimately improve patient lives by spending health care dollars more wisely.
On December 30, 2014, the Department of Health and Human Services Office of Inspector General (OIG) published its annual solicitation for the development and/or modification of safe harbor provisions under the Federal Anti-Kickback Statute. The OIG also requested recommendations for the development of new OIG Special Fraud Alerts (SFAs). The deadline to submit comments to the OIG pursuant to the solicitation is March 2, 2015.
In an effort to encourage hospitals to take advantage of the 68 percent settlement offer for previously denied inpatient claims,  the Centers for Medicare and Medicaid Services (CMS) recently announced a new procedure. Hospitals that are unable to produce the required list of claims eligible for settlement by October 31, 2014 (this Friday), may instead submit a request to CMS for a list of potentially eligible claims (a “potentials list”).
Recent Cases Demonstrate Potential Exposure for Both Physicians and Providers
Hospitals Can Settle Certain Claims Now for 68 Percent of Their Value
On July 11, 2014, amendments designed to reform Medicare regulations that the Centers for Medicare and Medicaid Services (CMS) has identified as “unnecessary, obsolete, or excessively burdensome on health care providers and suppliers” became effective.
ABOUT ARENT FOX LLP
Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.