Healthcare

Hundreds of physician practice acquisitions and healthcare-related transactions are in process at any given time. When the COVID-19 pandemic hit, the accompanying shutdown threw many such transactions into a state of uncertainty.

Recently, we spoke to Bob Homchick about today’s acquisition environment. A partner with Seattle-based Davis Wright Tremaine, Bob has played a leadership role in the American Health Law Association for many years. During our conversation, we identified six fundamental ways that COVID-19 will impact healthcare transactions currently underway, as well as those that may commence after the state of emergency ceases.

When considering Stark Law exceptions for vetting financial arrangements with physicians, we often witness a tendency to focus primarily on Fair Market Value (FMV). This is rightly so, as ensuring physician contracts comply with FMV is a critical part of risk management.

For those seeking valuation or appraisal services, the varying levels of services offered can often be confusing to navigate. Appraisers/valuators offer many different services to meet the needs of a diverse client base. Confusion in the process of selection can lead clients to select a service based solely on price, only later to discover, as with many things in life, you get what you pay for. 

An accountable care organization (“ACO”) is a healthcare delivery entity characterized by a payment model that facilitates coordination among providers — charged with the care of a specified patient population.

Participation in an ACO is voluntary, and participants must be willing to become accountable for the quality, cost, and overall care of the specified population. Commonly, ACOs receive capitated payments based on the size of the patient population served, though other reimbursement models exist. ACO participants are financially incentivized to lower healthcare costs while improving quality as they share in a portion of the excess between total capitated payments and total healthcare costs.