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Leadership in Action
Health Systems: Navigating Through a Complex Management Transaction
- Client: A leading health system in Ohio
- Type of Matter: Multi-step transaction
- Our Client's Challenge: To overcome potential negative reaction to the proposed transaction by presenting decision-makers with logical arguments and facts that supported the client's goal.
- The Goal: To manage, and eventually become the sole member of, a long-term acute-care and rehabilitation hospital in Ohio.
- Our Strategy: Our client, which has been operating the hospital under an interim management agreement, secured local approval after a series of public meetings and hearings before commissioners. The team anticipated potential negative reaction from segments of the community and addressed issues with logical, fact-based arguments that convinced commissioners and many objectors that the management transition would be beneficial to all involved.
- Results: While still in process, the transaction is expected to be completed without further objections. It was the subject of a story in respected trade journal Modern Healthcare due to the potential national interest.
Leadership in Action
- Regulatory: Crafting a strategy to secure approval of a healthcare industry acquisition
- Client: Health Plan of the Upper Ohio Valley
- Type of Matter: Regulatory approval of an acquisition
- Our Client's Challenge: When our client purchased the HomeTown Companies from Akron General (comprising an HIC/HMO, third party administrator and insurance carrier), numerous complex regulatory approvals were required.
- The Goal: Secure the necessary approvals to maintain HomeTown's licenses to operate in a significant number of Ohio counties.
- Our Strategy: Baker Hostetler lawyers undertook a multi-faceted strategic approach to regulatory approval. We structured the purchase as a stock acquisition, but because two of the HomeTown Companies operations had non-profit status, we amended their articles of incorporation to make our client their sole member in return for a cash contribution to Akron General. Because HICs are state-regulated, we had to seek approval from the Ohio Commissioner of Insurance and the West Virginia Department of Insurance, as well as from the Ohio Attorney General and with the Ohio Bureau of Workers Compensation.
- Results: We maintained 501(c)(4) status of the nonprofits for federal tax purposes, and secured all necessary regulatory approvals.
Hospitals
We counsel for-profit and not-for-profit hospitals, health systems and academic medical centers throughout Ohio and across the country on the full range of their operational concerns. Our areas of emphasis include:
- Restructuring transactions, including acquisitions, sales, affiliations, joint operating arrangements, joint ventures and mergers, including those that involve combinations of for-profit and not-for-profit operations.
- Serving as bond counsel, underwriter's counsel, borrower counsel, letter of credit bank counsel and trustee counsel in billions of dollars of healthcare financing. We have particular emphasis on debt transactions that encompass traditional fixed rate, variable rate, hedged, enhanced, insured, rated and not rated issues for hospitals and long-term care facilities as borrowers.
- Developing comprehensive privacy and security programs to comply with the HIPAA (Health Insurance Portability and Accountability Act) privacy regulations and state privacy laws.
- Dealing with issues that arise in the relationship between healthcare providers and managed care organizations, including negotiation of fees, claims adjudication, termination, contract reviews and breach of contract actions.
- Representing hospitals, their physicians and medical staff in medical malpractice, wrongful death and premises liability matters, including both successful defense in courts throughout the U.S., and limiting malpractice exposure through effective risk management and peer review programs.
- Counseling on a full range of general and specialized labor and employment issues: background investigations, discrimination cases, wage and hour issues, OSHA and safety compliance issues, union organization and bargaining issues, benefit and pension matters, medical staff review board and peer review proceedings, and physician contracting issues.
Representative Hospital Experience
- Successfully defended a hospital system in an action brought by a competitor that sought a share of a local grant subsidizing indigent care. Our client, one of the funding recipients, prevailed and was praised by the court for its success in providing indigent care.
- Represented a major healthcare institution in a series of transactions to finance an expansion program which included the issuance of tax-exempt notes, bonds and refunding bonds aggregating more than $500 million.
Physician Groups
Our Healthcare Team works with physician groups to structure not-for-profit and for-profit joint ventures and other relationships between and among physicians, physician groups, hospitals, special healthcare service providers and others in the industry. We help form ambulatory surgery centers, general and specialty physician organizations, and MRI diagnostic and imaging centers. Our lawyers are completely familiar with the wide variety of contractual relationships in today's complex health delivery system, including agreements with hospital-based physicians in the areas of pathology, anesthesia and emergency medicine.
We regularly represent physicians, dentists, nurses and other healthcare providers before state regulatory and licensing agencies. As part of our activities in this area we negotiate consent decrees and settlement releases, conduct confidential investigations to determine liability and appropriate defenses, submit applications to practice in multiple state jurisdictions, and ensure compliance with regulatory obligations and state laws. Specific experience includes:
- Help organize and structure healthcare entities and joint ventures, including surgery centers, imaging centers, cardiac catheterization centers and renal dialysis facilities.
- Structure a wide variety of physician group alternatives, including management service organizations and physician hospital organizations, integrated provider networks and disease management centers of excellence.
- Represent physicians, physician groups and dentists in complex medical negligence matters at the trial and appellate court levels and before applicable professional boards.
Regulatory
As the healthcare industry continues to see unprecedented regulation and even criminalization of activity, Baker Hostetler helps clients minimize the legal risks in regulatory compliance activities, including fraud and abuse,
Stark, EMTALA and false claims compliance. We work with boards, management compliance committees and officers on the changing needs and requirements of providers and others in the industry. We help clients establish corporate compliance programs tailored to their specific organization and assist corporate compliance officers in implementing compliance programs.
We guide clients through audits by the Office of Inspector General and the Centers for Medicare and Medicaid Services. Some of the areas in which we have counseled healthcare providers include coding and billing issues; Medicare pass-through coding, ICD9-CM coding, hospital revenue and condition coding; state-level regulatory matters, including licensure and certificates of need; and the Medicare outpatient prospective payment system, compliance, and prohibition against unbundling of hospital outpatient services.
In the event of criminal actions we can negotiate plea agreements, reducing charges and dealing with adverse publicity. We strive to minimize fines, penalties and sanctions and are skilled in negotiation consent decrees,
settlement agreements and releases.
Healthcare-Related Suppliers
Our lawyers advise a variety of manufacturers and distributors of medical devices, pharmaceuticals and providers of other products and services to healthcare providers. We represent national and international producers and distributors of pharmaceuticals in connection with product distribution, group purchasing organization agreements, manufacturer representation agreements and product liability matters.
About Baker Hostetler
Baker Hostetler lawyers help clients establish, maintain and protect market-leading positions across the United States and around the world. We offer clients the strength of 600+ lawyers in a full range of practices, a unique
geographic platform including both the coasts and the center of the country, a deep knowledge of industry issues and a 90-year track record of excellence and achievement.
For more information about our Healthcare industry focus:
National Co-Leaders
Thomas W. Kahle
513-929-3414
tkahle@bakerlaw.com
Christopher Swift
216.861.7461
cswift@bakerlaw.com
Cincinnati
Thomas W. Kahle
513.929.3414
tkahle@bakerlaw.com
Cleveland
Christopher Swift
216.861.7461
cswift@bakerlaw.com
Columbus
Richard W. Siehl
614.462.2639
rsiehl@bakerlaw.com
Costa Mesa
George Mooradian
714.966.8800
gmooradian@bakerlaw.com
Denver
David Waller
303.764.4093
dwaller@bakerlaw.com
Houston
Robert Wolin
713.646.1327
rwolin@bakerlaw.com
Los Angeles
Neil Carrey
310.442.8835
ncarrey@bakerlaw.com
New York
John J. Carney
212.589.4255
jcarney@bakerlaw.com
Orlando
Laurie Levin
407.649.4076
llevin@bakerlaw.com
Washington, DC
Lee Ellis
202.861.1521
lellis@bakerlaw.com
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