Healthcare

In a nutshell

Healthcare is an industry-specific practice area that encompasses a number of traditional law practices such as corporate and litigation. Because the industry is highly regulated, specialist healthcare lawyers are often needed to monitor and react to new regulations.

Typically, the matters that healthcare lawyers deal with encompass three different categories. First is the transactional element – essentially the buying or selling of healthcare businesses. Second is any litigation among healthcare companies, and third is advising on the regulatory sphere and in relation to any governmental legislative issues.

Healthcare is a massive part of the US economy. In 2015 healthcare spending was almost 18% of GDP, and by 2021 it is predicted to account for just under one-fifth of the country's economy. Many major firms have healthcare practices and there are many niche or boutique health firms, with many of them tied to specific states.

It is also a practice that continually evolves because of ever-changing laws. The passing of the Patient Protection and Affordable Care Act in March 2010 (aka Obamacare), for example, remains a landmark moment. One thing is for certain: the nationwide demand for healthcare advice and representation has never been greater.

Clients include investment funds who are interested in investing in healthcare, and established providers, like hospitals.

What lawyers do

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 Law). 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. According to Jeffrey Schneider of Hogan Lovells, however, “these are usually very complicated deals because of the regulatory constraints that exist, so you have to structure them in ways that you might not in other industries.”

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 says.
  • 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,” explains Hastings. “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. Schneider says: “It's about making sure clients comply with the vast array of regulations out there that limit a company's conduct, as well as helping clients think through problems and do things in the correct manner.”
  • The advice covers more than just the regulatory side. “There are nonregulatory issues to deal with as well, such as contractual issues with physicians and medical staff relationships,” Dennis Barry of King & Spalding states.
  • 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.

Realities of the job

  • Like every lawyer you have to be able to listen and to communicate but I think particularly for health care law you have to be able to read the law and fully understand its nuances. It is a highly regulatory practice area so you cannot be afraid of diving into statutory text and regulatory text,” says Edward S. Kornreich of Proskauer Rose.
  • Kornreich continues: “The joy I get from solving a problem for a client is what drives the practice. In healthcare, clients tend to be people who are interested in serving the public and by solving any issues you advance the public interest.”
  • Kornreich adds that the type of person who would thrive in this area would be “somebody who is a good communicator, thoughtful and has the ability to and enjoys reading, understanding and explaining the law, as well as applying it in various contexts. It is also useful to have someone who is orientated toward social welfare.”
  •  On working hours, Kornreich states “I think they are reasonable on average. This is generally because of the nature of people as they tend to be more willing to tolerate personal lives on the part of their employees.”
  • “I think what I like the most is I'm representing clients who are dedicated to making people better. It is a very human-orientated practice. It's not just about numbers or strategy or markets. The consumers really matter,” says Greg Luce of Skadden.
  • To succeed in this practice area Luce goes on to say: “You have to have a thorough understanding of how this business and its sectors work. Every industry has its qualities but you need to understand how a healthcare provider or manufacturer operates to understand the implications of the legal regime. You really need to know your client.”
  • Luce continues in offering general career advice for this practice area: “I think you need to match your expectations to your interests. If you want to be a litigator and test yourself and you want to be in the cauldron of a court room then do. If you want to be in healthcare and get into the policy and regulations and interested in how industry is evolving, it is a great field. It is an area that offers a lot of opportunities for entrepreneurial thinkers.”
  • “You need to be solution-orientated and practical. There is a lot of gray area in the law because it is always developing so you have to review the facts and law carefully and provide a practical solution. It is a very complex practice area so you need to be able to take something complicated and explain it in a straight forward way for your clients,” says Jim Owens of McDermott Will & Emery.
  • Owens tell us his favorite aspect of working in healthcare: “I love representing providers. Doctors and nurses and other healthcare professionals want to help people. They have good intentions and are very selfless – it makes me happy to work with those people. Everyone has healthcare in their life, its a personal thing. To be able to work in an industry that is doing good is rewarding.”
  • However Owens warns against the trickier aspects of the practice area: “The amount of change is difficult so you have to keep on top of it. You always have to check what the current law is as you deliver advice. There are so many aspects to what we do which makes it very complicated.”
  • “I would say that if you have an interest in healthcare or background in healthcare you should consider this field. In the US the population is ageing and the demand is rising. Because of this demand it will be a specialism in demand,” Owens tell us.

Sector awareness

Waller"For attorneys with the ability to navigate the technical regulatory interplay governing the healthcare industry [...] significant career opportunities are available in both private practice and in-house legal roles." — Healthcare leaders at Waller give an insider's view of life as a healthcare lawyer and their view of today's market.>>>

  • Under the new Republican administration, a huge issue is the repeal of Obamacare, so keep up with the events as they unfold.
  • The future of regulatory enforcement is also uncertain. The assumption is that there will be less regulation but this is not known for sure.
  • There is an increasing consolidation amongst care providers and integration of hospitals with other facilities. There is an increasing focus on the social determinants of healthcare, where the discourse concentrates on how services are provided and finding preventative means to keep people out of hospital.
  • Edward Kornreich says the Trump administration could mean "ACA repeal, and its unknown replacement, if any. Uncertainty is enhanced by possible Medicare and Medicaid program changes. While there is the possibility of substantial regulatory reform, this is less certain in healthcare."
  • Greg Luce offers his opinion on the Trump administration: “I think it will be very significant. It's hard to imagine a single sector that will be more affected than healthcare, with combined House and Senate interest in repealing and replacing Obamacare. It will make a sea of change in the way healthcare will be delivered. The main difference I think will be less of a role for federalist healthcare policy and increased private enterprise and state-directed healthcare.”
  • Jim Owens says: “I think right now the general view is that it will be positive for most businesses and sort of the same with healthcare. Trump said he wants to repeal Obamacare, but Congress cannot do so successfully without coming up with a replacement law. If a replacement law is passed, it will provide a large amount of legal work for healthcare lawyers.”
  • Monitoring legislative changes is a major task for all healthcare and life sciences lawyers. Junior associates especially can be involved in writing up summaries of the implications of new legislation for various client sectors.
  • The ACA has also placed an emphasis on providing quality, value-for-money care; consequently hospitals are trying to maintain financial competitiveness while still providing excellent services. Mergers have become an increasingly popular method to try and boost savings but hospitals need to ensure they don't fall foul of antitrust laws or regulators in the process. Law firms will continue to see a range of healthcare clients seeking advice on mergers, and regulatory and antitrust matters.
  • Pharmaceutical, biotech and medical companies have also seen a rise in mergers as they aim to continue producing high-quality products without excessive spending.
  • Pharmaceutical company mergers will be further driven by the expiration of several pharmaceutical patents. It's expected that those losing patents will seek to protect themselves from profit losses by acquiring companies with lucrative products.