Healthcare

One of our favorite sessions at the AHLA Annual Meeting is the Year-in-Review by Jack Schroeder and Elizabeth Carder-Thompson. It is a great way to get caught up on a year’s worth of activity in health law in 120 minutes. Out of the volumes of information Jack and Elizabeth read to summarize for conference attendees, we found 10 pieces of information that were particularly interesting for our practice in these days of constant and rapid change. We felt these would be worth sharing:

2015 was a tumultuous year in many ways. Mergers and acquisitions changed the landscape for both healthcare providers and the insurance industry, and legal challenges to the ACA provided uncertainty. Healthcare organizations continued to move from volume to value as they restructured and addressed costs and service delivery. Improving population health moved from discussion to action in many organizations.

On Nov. 2, President Obama signed the Bipartisan Budget Act of 2015 (H.R. 1314).  One of the more significant provisions, aside from the suspension of the national debt ceiling and aversion of a government shutdown, is the matter of site-neutral payments, the antithesis of the site-of-service differential. This legislation is not completely unexpected, as MedPAC has recommended for quite some time that payment differentials should be eliminated. 

Today’s sessions at AHLA’s Transactions Program made me reflect on the fact that time has taught us valuable lessons about what not to do in the future. An initial wave of hospital affiliations and acquisitions has occurred with mixed success.

Three recognizable trends were dicussed today that are reshaping healthcare transactions:

Most hospital system acquisitions of physician practices are structured as asset purchases, with the former physician-owners and employed physicians of the acquired practice subsequently employed by the purchasing hospital or a hospital-controlled entity. Because of the financial and referral relationships in arrangements such as these, the Stark law and federal anti-kickback statute are nearly always implicated, and compliance with these laws dictates that the financial arrangements be consistent with fair market value. Exceeding fair market value can expose the parties to potentially staggering fines and penalties if found liable as part of a qui tam or government enforcement action. Yet, as discussed in a recent post, New White Paper Doesn't Settle the Workforce Valuation Debate, diversity of opinion exists on certain valuation issues in these types of transactions.