Ongoing changes in the health care industry have placed pressure on providers and payors to reduce costs, respond to a managed care environment, and comply with complicated Medicare, Medicaid, anti-kickback, self-referral, tax, and other regulations. These pressures have led to an unprecedented number of horizontal and vertical affiliations among participants in the health care field.

To thrive in an era of such change, health care providers and third-party payors must be able to draw on advisors who are experienced in several critical areas, including health care regulatory, transactional, compliance, insurance, tax, employee benefits, antitrust, and litigation.

Our Health Care practice group has that experience. We represent for-profit and nonprofit hospitals, nursing homes, physician groups, home health agencies, durable medical equipment suppliers, practice management companies, management service organizations (MSOs), health maintenance organizations (HMOs), preferred provider organizations (PPOs), independent practice associations (IPAs), trade associations, and other organizations that provide or finance health care services. Our depth of regulatory knowledge in the health care industry - and our established track record of helping sophisticated clients close complicated transactions - enable us to provide a full range of health care legal services to our clients.

Regulatory

Extensive federal and state regulation of the health care industry causes any transaction or other activity to be evaluated, in part, through the prism of regulatory compliance. Included in the Health Care group are lawyers who have spent their careers counseling clients on compliance with federal and state laws and regulations relating to health care.

We advise a broad spectrum of health care providers and suppliers on Medicare and Medicaid reimbursement coverage and payment; the federal Anti-Kickback Statute; the anti-referral provisions of the Social Security Act (Stark II), False Claims Act, and similar state laws and regulations. We have also represented health care providers before the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, state health planning commissions, licensing and certification agencies, state agencies regulating elder care facilities, and state cost review agencies.

Recent Representative Regulatory Projects

• Ongoing regulatory representation and serving as general counsel for health care clients, including hospitals, assisted living and skilled nursing facilities, disease management companies, home health agencies, durable medical equipment companies, health care database companies, and diversified medical services companies.
• Review of the fraud and abuse aspects of health care clients’ arrangements with various providers.
• Advice to providers on Medicare requirements for electronic medical records and billing.
• Successful pursuit of an order requiring a state health planning agency to act upon a rehabilitation hospital’s certificate of need application within a specified period of time.
• Hart-Scott-Rodino filings.
• Advice to numerous health care clients on Medicare and Medicaid regulatory issues and billing requirements.
• Certificates of need and licenses for hospitals, sheltered care facilities, continuing care retirement communities, ambulatory surgical centers, MRI centers, and PET imaging centers.
• Advice on antitrust implications of various forms of provider collaboration, including exclusive and non-exclusive physician network ventures.
• Transactions structured to meet a myriad of legal regulatory hurdles.
• Advice to health care clients on Internet transmission and storage of patient records and other health care information.
• Development of Internet-based health care organizations.

Health Care Transactional

Our group includes seasoned mergers, acquisitions, and transactional lawyers with extensive experience in structuring, financing, negotiating, documenting, and closing deals involving health care facilities and other providers.

We have been actively involved in numerous mergers and acquisitions of health care providers; acquisitions and sales of substantial health care assets; corporate restructuring of health care providers; joint ventures and strategic alliances among providers, physicians and payors; development of provider networks; secured loans; and structuring syndications and other securities transactions. In addition, many of our clients are emerging health care companies and our lawyers have a wealth of knowledge and experience representing these companies in areas such as venture capital and other private financing, corporate partnering including research and development arrangements, initial public offerings, intellectual property, and growth and exit strategies.

We also represent various types of providers in their ongoing operations, including hospitals, outpatient facilities, nursing homes, lifecare communities, physician groups, home health care agencies, hospices, suppliers, MSOs, physician-hospital organizations (PHOs), IPAs, and physician practice management companies.

Recent Representative Health Care Transactions

• Numerous acquisitions and affiliations of hospitals including negotiating the acquisition vehicles, obtaining tax-exempt financing for the transactions, and conducting regulatory compliance reviews of the acquired systems.
• Development, financing, and acquisition of eldercare facilities throughout the United States .
• Formation of radiology and other specialty physician practice management companies, including structuring the acquisition vehicles, tax counseling on valuation and other issues, asset acquisitions, and advice on private placement issues under the federal and state securities laws.
• Numerous roll-up and financing transactions for practice management companies.
• Formation of primary care and specialist physician networks, including structuring the acquisition vehicle, counseling on securities law matters, and practice acquisitions.
• Advising a national provider of dental management services in mergers and acquisitions, obtaining venture capital financing, and ongoing advice in health regulatory and corporate matters.
• Joint ventures to acquire or develop and operate regional networks of outpatient surgi-centers, outpatient radiology centers, and cancer treatment centers.
• Development, sale and operation of independent living and nursing home complexes (continuing care retirement communities), including advising on organizational and tax issues, advising on formation of condominium and cooperative housing corporations, and obtaining approval by state agencies.
• Representation of a major multinational insurer in connection with its investments in the development of continuing care retirement communities.
• Representation of a national management services organization in the sale of a division.
• Initial public offerings for health care entities.
• Syndications of equity interests to raise capital for various health care ventures.
• Negotiation of exclusive arrangements between physicians and hospitals.
• Representation of hospitals and physicians in creating systems to facilitate the offering of professional services, including for-profit and nonprofit IPAs, PHOs, and MSOs.
• Complex provider acquisitions and contracting with MSOs.
• A variety of single and multi-specialty IPAs, including shareholding and non-shareholding ventures, LLCs, and nonprofit ventures.
• Multiple acquisitions in connection with the establishment of physician practice management groups.
• Transactions involving the securitization of Medicare and Medicaid receivables.
• Numerous physician employment, recruiting, and income guaranty agreements.
• Hospital management agreements.

Health Care Fraud and Compliance

In addition to our general health care experience, we represent clients that are targets of an investigation or are subject to allegations that they committed health care fraud, or victims of the fraud of others, including employees, partners in joint ventures, and suppliers.

We work closely with lawyers in the firm’s White Collar group, who are experienced in negotiating settlements on behalf of health care clients with the government and in defending qui tam suits by whistle blowers. In addition, we have designed numerous corporate compliance programs for health care clients to respond to government directives and to prevent fraud from occurring in the first instance. We also assist health care clients in the ongoing education and training of their employees in methods to prevent and detect fraud, as required by corporate compliance programs.

Recent Representative Health Care Fraud and Compliance Projects

• Development and implementation of health care fraud and corporate compliance programs for hospitals and national home health care and durable medical equipment companies.
• On-call subpoena and search warrant service for health care providers.
• Defense of a wholesaler of prescription drugs in a combined drug misbranding and adulteration investigation conducted by the FBI and Food and Drug Administration; the matter was not prosecuted.
• Defense of a national health care provider in an anti-kickback investigation; after the search warrant was executed, the matter was not prosecuted.
• Successful representation of a national home health care provider in a qui tam action in the federal courts involving alleged violation of state law requirements for health care facilities.
• Negotiation of a favorable settlement of civil false claims allegations for a manufacturer of medical equipment investigated for producing defective supplies and selling fraudulently to the Veterans Administration.
• Successful argument resulting in government decision not to pursue civil action against a major research university for alleged fraud in research cost submission to federal agencies.
• Numerous fraud and abuse and physician self-referral reviews of hospital contracts, hospital-physician joint ventures, and employment and independent contractor agreements.

Health Insurance and Managed Care

Our lawyers are experienced in insurance and reinsurance law in the health care industry. We have represented HMOs and PPOs in their formation, operation, acquisition of other insurers and plans, reorganizations, recapitalizations, receiverships, and general regulatory and compliance advice.

We also have extensive experience in the administration of domiciliary and ancillary insurance company receiverships, and represent the Illinois Director of Insurance as rehabilitator or liquidator for a number of insurance companies. Through our representation of insurance company receivers, as well as our pro bono representation of the National Association of Insurance Commissioners and the National Conference of Insurance Legislators, we have established productive working relationships with many of the state insurance departments and receivership offices.

In addition, we have represented large employers, insurers, and providers in direct or selective contracting for health care services. Our lawyers have negotiated and prepared managed care contracts that include numerous risk-sharing arrangements (including global capitation, shadow capitation, and withhold arrangements), and the delegation of credentialing, utilization review, and claims processing functions. We have prepared participating provider agreements and management services agreements and have addressed regulatory and operational issues for health plan clients.

Recent Representative Projects in Health Insurance and Managed Care

• Representation of a national HMO’s manager in the proposed reorganization and recapitalization of the HMO.
• Appointment as hearing officer for the Illinois Director of Insurance.
• Advice to companies on the creation of captive insurers and subsidiary insurance companies.
• Defense of health insurance policies on the basis of preexisting medical conditions.
• Preparation of Form A filings in connection with the acquisition of existing operational HMOs, as well as insolvent HMOs.
• Representation of national HMOs in acquiring regional HMOs.
• Establishment of accident and health insurance companies holding multiple licenses to operate an HMO as well as PPO and POS programs.
• Formation of HMOs and PPOs, as well as assistance to large employers, in direct or selective contracting for health care services.
• Advice to representatives of PPOs and IPAs on insurance issues related to capitated and other risk-sharing provider payment mechanisms.
• Representation of clients that acquire ownership interests in HMOs, including HMOs in receivership, and preparing and filing applications for initial certificates of authority to operate HMOs serving commercial, Medicare, and Medicaid populations.
• Advice to clients on regulatory and structural issues related to the formation of managed care community networks to participate in the Illinois MediPlan Plus Program.

Taxation

Tax issues play a critical role in the structuring of significant business transactions. When a taxable entity is involved, advice can be essential to minimize potential tax exposure by, for example, structuring a transaction as a tax-free reorganization or providing for capital gains treatment for the seller in an acquisition.

In the health care arena, tax-exempt providers are finding it increasingly necessary to consummate transactions with for-profit entities. These transactions raise complicated issues of private inurement, unrelated business income tax, and preservation of the tax-exempt status of bonds. We have extensive experience in dealing with tax issues in both a for-profit and nonprofit context.

Our tax practice covers federal, state and local taxation for regular corporations, S corporations, limited liability companies, limited partnerships, trusts, partnerships, individuals, tax-exempt organizations, and other special status business entities. Among other things, our tax lawyers have experience organizing and obtaining tax-exempt status for nonprofit organizations, advising these organizations on regulatory compliance matters, and preparing membership, operative, and financing documents. Our tax lawyers are also experienced in taxable and tax-exempt bond financing and various state income tax matters.

ERISA and Employee Benefits

As health care providers restructure to meet the demands of the marketplace, traps abound for some in the employee benefits and executive compensation area. Tax rules dealing with affiliated service groups and, leased employees, can complicate pension arrangements for physicians and other highly compensated employees and can restrict deferred compensation and supplemental pension arrangements for executives of nonprofit employers. Still other rules concerning multiple employer welfare arrangements can expose joint health and other benefit arrangements among affiliated entities to regulation under state insurance statutes.

Provider networks may find themselves confronting ERISA’s maze of prohibited transaction and fiduciary responsibility rules as they seek to structure reimbursement mechanisms between components of their networks. We help employers deal with these complexities in structuring entities and designing qualified retirement benefit plans.

We also counsel clients on appropriate welfare plans, compliance with applicable requirements under the Internal Revenue Code, ERISA, and other federal laws (such as the Americans with Disabilities Act), preemption of state laws under ERISA, and the fiduciary obligations of associations, corporations, and other entities. We have helped clients develop medical plans and cafeteria (flexible benefit) plans and have advised clients on the COBRA group health benefit continuation rights.

Antitrust

The financing and delivery of health care have undergone dramatic changes since the 1990s. Providers, including hospitals, are merging, consolidating, or looking to collaborate through joint ventures, hospital-physician organizations, and single and multi-specialty networks. These collaborative efforts among competitors can present significant legal issues under federal and state antitrust, consumer protection, and health care laws. Our antitrust lawyers have extensive experience in counseling health care clients on transaction structures to address these issues. Our lawyers practice in federal and state courts throughout the country and regularly represent clients before the Federal Trade Commission, the Antitrust Division of the Department of Justice, and state attorneys general.

Professional Liability and Litigation

When our health care clients are involved in litigation, we call upon our experienced litigation lawyers. Our lawyers have been involved in many of the significant civil litigation cases, representing national, regional, and local health care business entities in the prosecution and defense of a wide range of commercial and malpractice actions.

Our lawyers appear before courts and agencies at the federal and state levels in such areas as real estate finance and development; health planning; Medicare reimbursement; insurance coverage; medical malpractice; banking; antitrust enforcement; construction contracts; and business torts. The firm is also active in handling arbitrations, mediations, and other forms of alternative dispute resolution.