Healthcare

In a nutshell

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Healthcare is a massive part of the US economy. In June 2011, this reached an all-time high of 18.2 percent (by 2019 it will be almost 20 percent). It is the largest single sector of the economy by number of employees.

Many major firms have healthcare practices and there are many niche or boutique health firms – many of them tied to specific states. Why is there a need for so many health lawyers? “The main difference with other sectors of the economy is the unique and intensive regulatory environment,” explains Doug Hastings, chair of Epstein Becker & Green and member of its healthcare and life sciences practice.

Health law practitioners provide regulatory advice on the implementation of (new) legislation, and advise healthcare companies in transactions, commercial litigation and government investigations. After the passing of the Patient Protection and Affordable Care Act in March 2010 (aka ObamaCare), the nationwide demand for healthcare advice and representation has never been greater.

What healthcare lawyers do

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Healthcare: transactional 

  • Healthcare lawyers are sometimes brought in as troubleshooters at the same stage of a deal that tax and antitrust attorneys are brought in (see Corporate section). This is often the case for smaller BigLaw health practices and local healthcare boutiques.
  • At other times healthcare lawyers will run a deal from soup to nuts. This happens when there are numerous health industry clients or statutes involved, so lawyers who understand the regulatory context of a deal need to be involved from the outset. This happens more often in larger BigLaw healthcare practices and boutiques, but is increasingly common given the complexity of new healthcare reforms.
  • Healthcare transactional work involves “putting a deal together and doing the due diligence as normal, but is also infused with the additional variety of regulatory issues,” says Doug Hastings.

Healthcare: litigation 

  • Litigation work – especially in relation to government investigations – is “the high end of regulatory healthcare work for people who have been at it for a long time and are really good,” Hastings tells us.
  • Government-funded Medicare and Medicaid payments are a major source of litigation and government investigations. “There is a whole set of rules on how you can get paid as a healthcare provider for Medicare and Medicaid services,” Hastings explains. “Anyone that provides healthcare – hospitals, physicians, hospices, home care providers – will have some Medicare patients. Not only are there questions surrounding the eligibility and amount of payment, but providers might face anything from a routine government audit to an investigation into healthcare fraud.”
  • Healthcare and life sciences practices see a lot of qui tam litigation – cases in which someone who assists with a government prosecution can receive all or part of the penalty imposed.

Healthcare: advice 

  • Outside the times when healthcare lawyers are called in for litigation and transactions, they are constantly providing regulatory advice. “All the way along practices like ours are giving companies advice,” Hastings explains. “Our clients have intensive compliance programs. If they have issues with that compliance we get brought in. We might then negotiate a settlement with the government.”
  • Among the key pieces of legislation governing Medicare fraud and abuse are the antikickback law and the Stark Law. The latter governs physicians’ referral of patients to medical facilities in which that physician has a financial interest.
  • Federal antitrust laws and Food & Drug Administration regulations also form an important component of health lawyers’ work.

What top healthcare firm Epstein Becker & Green says about being an attorney in the healthcare industry…

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Current Healthcare Legal Trends

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  • On March 23, 2010, President Obama signed H.R. 3590, the Patient Protection and Affordable Care Act ("PPACA"), into law. Following the enactment of PPACA, H.R. 4872, the Health Care and Education Reconciliation Act of 2010, was enacted into law on March 30, 2010, "reconciling" and revising portions of PPACA. Health care industry organizations need help understanding the impact of this legislation in order to begin its implementation. As health care is the largest and fastest growing component of the American economy, its size and complexity has led to high-stakes litigation among providers, manufacturers, insurers and, overwhelmingly, federal and state law enforcement agencies and qui tam relators and plaintiffs' lawyers acting in the name of the government. What once were disputes that were easily managed, now create risks that routinely are measured in the tens and hundreds of millions of dollars. And for targeted industries such as hospital systems, pharmaceutical manufacturers, benefits managers and nursing facilities, the stakes in fraud cases sometimes exceed billions.
  • Alongside endeavors to improve health outcomes are concerted efforts to improve the intersection between the delivery of health care and developing new technologies. As such, a new segment of the health care industry and health law has begun to emerge, addressing the rise of mobile health (or mHealth) which uses information and communication technology (e.g., computers, mobile phones, patient monitors, etc.) for health services and information.    
  • There is renewed interest by federal antitrust enforcers (the Federal Trade Commission and the Department of Justice) to examine health care transactions and to determine whether health care providers and insurers are potentially engaged in improper, anti-competitive behavior. 
  • Over the last several years, the FDA has announced aggressive enforcement procedures, stating that “the FDA must be vigilant, the FDA must be strategic, the FDA must be quick, and the FDA must be visible” (FDA Commissioner Margaret Hamburg). As such, there have been more warning letters, more inspections, more injunctions and more inspection fees, subpoenas and detained products.

Business Climate – Level of Activity and Developments

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  • Although the HIPAA privacy and security requirements have been in existence for a number of years, 2011 is marked as the year in which the federal and state regulatory enforcers began to step up their enforcement against health care entities, with one health care entity being fined over $4 million. 
  • There is an expectation that the overall level of M&A activity for health care and life sciences companies will continue to be positive in 2012.
  • Continued fervor of transactions/affiliations amongst different components of the health care industry. Increase in number of affiliations among for profit and not for profit health care systems.
  • As was the case in the 1990s, physician practices will continue to be acquired by hospitals and insurance companies.

What an Up and Coming Health Care Attorney Can Expect to Be Working on in 10 Years

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  • Assisting clients in responding to government audits and investigations.
  • Structuring, negotiating and documenting complex health care transactions.
  • Advising clients on impact of legislative and regulatory changes.
  • Counseling pharmaceutical, medical device, and bio companies in: (i) maneuvering the increased regulatory oversight by the Food and Drug Administration; and (ii) protecting these companies’ intellectual property.
 

Epstein Becker & Green’s Work in the Health Care Industry

Epstein Becker & Green was founded as a law firm dedicated to the health care industry. Today, there are more than 100 attorneys in the Health Care and Life Sciences Practice. These attorneys serve a wide spectrum of health care organizations in capacities ranging from general counsel to special counsel on particularly complex issues. EBG’s clients include academic medical centers, ambulatory care facilities, biotechnology and life sciences companies, health plans and other health care insurers, hospitals and health systems, investment banks and venture capital firms, pharmaceutical and medical device manufacturers, physician group practices/management companies, post-acute and long-term care providers, and suppliers and distributors.

About the Authors: 

Douglas A. Hastings currently serves as Chair of the Board of Directors of Epstein Becker & Green, P.C. and is a Member of the Firm's Health Care and Life Sciences Practice in the Washington, D.C., office. Mr. Hastings provides a wide range of health care organizations with strategic and transactional legal guidance in responding to the legal challenges and opportunities of the rapidly changing U.S. health care system. He has become recognized as one of the nation's leading resources on accountable care, value-based payment and health care delivery system reform.

David E. Matyas is a Member of the Firm’s Health Care and Life Sciences Practice in the Washington, D.C., office, and his practice focuses on federal and state fraud issues such as anti-kickback, self-referral, false claims and regulatory compliance. Mr. Matyas represents an array of health care providers including hospitals and health systems, pharmaceutical and medical device manufacturers, academic medical centers, retail and specialty pharmacies, ambulatory surgery centers, home health agencies, and physician organizations. He also advises investors and other financial institutions that invest in or support the health care industry.

Both Messrs. Hastings and Matyas are recognized by Chambers USA as leading health care attorneys.