Practice Areas & Industries: Duane Morris LLP


Hospitals and Health Systems Return to Practice Areas & Industries

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Practice/Industry Group Overview

The business issues that hospitals and health systems face are extraordinarily complex. Administrators must balance the needs of patients and staff with the growing uncertainty that results from the increased demand for medical care and the decreased federal and state dollars to pay for it. Hospitals are dependent on Medicare and Medicaid financing, which leads to disputes involving reimbursement for services rendered and interpretation of state and federal regulations. The negotiation and enforcement of managed-care contracts demand knowledge of the cost of services, as well as state and federal law governing insurance, managed-care and healthcare contracting. Professional and institutional licensure and accreditation bodies are becoming increasingly vigilant, due to reports questioning the quality of care rendered in academic and community hospitals. Liability and staffing issues surface on almost a daily basis, as hospitals are faced with shortages of nursing and medical staff due to the high cost of malpractice insurance and threats of collective bargaining.

Employment and staff-credentialing issues remain important to hospitals striving for a high level of professionalism while attempting to decrease professional liability. Governance at healthcare facilities is under increasing scrutiny, leading to concern about compliance with federal and state common law, statutory and regulatory mandates related to fiduciary obligations of board members, senior management and highly compensated physicians. Concerns about fraud and abuse, kickbacks and Stark law violations dominate the thinking of hospital financial managers as institutions seek to expand their services through joint ventures, mergers and acquisitions. In addition, HIPAA regulations and homeland security issues are requiring hospitals to implement major changes in policies and procedures.


Our healthcare lawyers are skilled in handling all of the diverse issues that confront hospitals and health systems. We have extensive experience counseling healthcare systems and community and specialty hospitals. We also work with a number of hospitals in academic medical centers and are well versed in the issues faced by teaching hospitals and faculty practice plans. Several of our lawyers have served as in-house general counsel at major teaching hospitals and trade associations. We serve as outside general counsel to hospitals and health systems across the United States, as well as to The Hospital & HealthSystem Association of Pennsylvania and the Illinois Health Care Association. We have also represented the New Jersey Hospital Association and the Connecticut Hospital Association, and we work closely with hospital associations in other states. Attorneys and medical professionals, employed by a Duane Morris subsidiary, work with hospitals to provide innovative solutions to problems related to billing, coding and denial of claims. When issues cannot be resolved amicably, our lawyers represent hospitals and health systems in litigation before administrative tribunals and trial and appellate courts at all state and federal levels, including the U.S. Supreme Court.

The following is a sampling of the many different areas in which we advise and represent our hospital and health system clients:

Mergers and Acquisitions

The lawyers in our healthcare group have represented hospitals in transactions of all types, including acquisitions and sales of single facilities and health systems (both nonprofit and for-profit), corporate restructurings, syndications and other offerings and conversions of securities.

Joint Ventures and Affiliation Transactions

We have extensive experience in representing hospitals and health systems in the development of joint ventures with physicians and other providers. Our attorneys have helped to structure joint ventures for facilities ranging from whole hospitals to ambulatory surgery centers, radiation oncology centers, cardiac catheterization labs, lithotripsy centers, diagnostic imaging centers and vascular access centers.

Medical Staff Issues

Duane Morris attorneys represent hospitals, health systems and their medical staffs in all issues involving the medical staff. These include everything from development and revision of medical staff bylaws, compliance plans, policies and procedures, work with the institution, system and the medical staff to achieve compliance with the Joint Commission and other accreditation standards, federal and state regulatory and licensure requirements, Medicare conditions of participation and issues involving disruptive physicians. Our lawyers often represent hospitals, health systems, and their senior medical and lay administrators and board members in disputes involving discipline or termination of physicians, including representation at fair hearings and in trial and appellate court proceedings involving medical staff privileges, defamation and related claims. This work also includes counseling hospital clients on mandatory reporting to the National Practitioner Data Bank and other federal and state data banks.

Litigation and Alternative Dispute Resolution (ADR)

Whether a hospital files a lawsuit or is the defendant in a legal action against another healthcare provider, patient, payer, management company, product distributor or other entity, hospitals face litigation in all types of cases on a daily basis. Our healthcare attorneys represent hospitals and health systems in litigation and arbitration involving all kinds of state and federal contract disputes, tort actions, patient disputes, reimbursement issues, actions in court and federal and state administrative agencies over Medicare/Medicaid regulations, lawsuits and arbitration claims between physicians and hospitals, state and federal licensure, and credentialing matters. In addition, Duane Morris healthcare litigators represent hospitals in managed-care disputes, litigation with former joint venture partners and in civil and criminal actions involving the Stark Law, False Claims Act and Anti-Kickback Statute.

Healthcare Regulation

Healthcare is one of the most highly regulated industries in the United States. No law related to healthcare is passed at the federal or state level without interpretative regulations. The new Patient Protection and Affordable Healthcare Act will have volumes of regulations requiring interpretation by hospitals and other providers. Duane Morris healthcare attorneys represent hospital and health system clients as counselors, negotiators and litigators in every aspect of federal and state regulation involving healthcare. These include, among others, the Stark Law, the Anti-Kickback Statute, the False Claims Act and Civil Monetary Penalties Law, as well as state licensing, medical practice structure, anti-referral, anti-kickback and healthcare fraud laws. In addition, attorneys in the Healthcare Practice Group have represented three state hospital associations in matters involving development and interpretation of regulations, as well as related strategies, policies and procedures for hospital members, and also major litigation to retrieve funds for hospital members.

Research and Clinical Trial Issues

In today's healthcare marketplace, research and clinical trials have gained a position of paramount importance for hospitals. Research can be one of the backbones of specialized hospitals for surgery, children and treatment of cancer. Many hospitals of all sizes and locations participate as research sites for clinical trials for the development of new drugs, treatments or medical devices. Duane Morris attorneys represent hospitals in investigations pursuant to National Institutes of Health research protocols, advise on reimbursement related to research studies, and participate as arbitrators of disputes over clinical-trial contracts resulting in losses to the hospital and other parties in the United States and around the world. Our attorneys also assist clients in the development, negotiation and interpretation of contracts for new research processes, as well as FDA and other approvals.

Tax Matters

Our clients deal regularly with a myriad of complicated federal and state tax law matters, such as federal unrelated business income and compensation issues in the exempt organization realm, and state law sales and property tax exemption questions, which have gained national attention during the past few years. Our team of seasoned tax attorneys is well-equipped to lead our clients through the maze of tax regulations and find solutions that add value, whether as part of routine tax planning or in connection with a particular transaction.

Antitrust Issues

When our clients require antitrust advice, we can offer our services to minimize the potential for antitrust violations and liability, to ensure compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and to assist with Federal Trade Commission and Department of Justice investigations of, and litigation relating to, mergers and acquisitions. Our lawyers have also successfully represented hospitals and health systems in numerous antitrust matters involving medical staff issues and negotiation of provider contracts.

Labor and Employment Matters

Hospitals are often among the largest employers in their city or geographic area. Duane Morris attorneys represent hospitals in almost all aspects of labor and employment law that arise in healthcare institutions. This includes drafting, negotiation, arbitration, mediation and litigation of employment contracts and independent contractor agreements for physicians, nurses, and other skilled and unskilled healthcare workers, as well as the preparation of exclusive contracts and restrictive covenant agreements with members of the medical staff. We help hospital staff to conduct credentialing proceedings and represent the hospital in fair hearings related to restriction or termination of physicians' privileges to practice at the institution. Our attorneys guide institutions to develop policies, procedures and compliance plans to meet accreditation requirements for handling disruptive physicians, and we work with hospitals to satisfy their reporting requirements to the National Practitioner Data Bank.

We assist hospitals in training employees on diversity and harassment issues, develop policies and procedures designed to protect their interests, and provide defense in administrative proceedings and court litigation brought by current and former employees based on federal labor and employment statutes, including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Older Workers Benefit Protection Act, Sections 503 and 504 of the Rehabilitation Act, Executive Order 11246, the Genetic Information Non-Discrimination Act, the Fair Labor Standards Act, the Occupational Safety and Health Act, and the Employee Retirement Insurance and Security Act, as well as state and local laws, which often provide even broader regulation with regard to discrimination, overtime work and wage payment requirements. Duane Morris attorneys also work with hospital administrators to prevent unionization, manage picketing and strike efforts, negotiate collective bargaining agreements and defend hospitals in unfair labor practice proceedings. Our benefits attorneys develop and administer pension and profit-sharing plans for employees of the institution.

Immigration Law

Duane Morris attorneys are involved in all aspects of immigration law for hospital clients. Our attorneys assist hospitals to secure H-1B, O and non-immigrant visas and green cards for hospital personnel, including physicians, nurses, occupational therapists, physical therapists, biomedical engineers and others. In essence, we provide all immigration services to assist the hospital in hiring and maintaining foreign personnel. Our immigration lawyers offer services regarding I-9 compliance, including development of policies, training, conducting internal audits, responding to I-9 audits from DHS and Notices of Intent to Fine. We also provide assistance with consular processing at U.S. embassies for personnel coming to work for hospitals in the United States.

Information Technology and Intellectual Property

Improvements in the use and quality of healthcare information technology will likely be one of the major developments in the healthcare field during the coming decade. Our lawyers work with our hospital and health system clients to identify and resolve critical issues in negotiating technology licensing, implementation and service agreements for applications such as electronic health records (EHR), computerized physician order entry (CPOE) and billing systems. We are also adept at facilitating the efficient resolution of disputes between our clients and their information technology service providers. Our group of patent, trademark and copyright attorneys can assist with virtually any type of intellectual property matter, from patent prosecution to trademark infringement, to help protect our clients' valuable intellectual property assets.

Real Estate

Our healthcare attorneys collaborate with members of our real estate practice on a daily basis on matters both routine and unusual, from negotiating facility leases to creating complex condominium ownership structures. We can provide advice in all matters relating to the purchase, sale, leasing, development, financing, use and management of real property; and with offices located across the United States, we are well positioned to deal with the "local" nature of real property matters.

International Law

We have broad experience in representing clients in transactions involving foreign healthcare businesses, from telemedicine contracts to joint ventures for the development of new hospitals and clinics in foreign countries. Using our team-based approach, we are able to call on the expertise of lawyers in our non-U.S. offices to help navigate through the requirements of local laws. For matters closer to home, our immigration lawyers frequently assist our hospital clients in obtaining J-1 waivers and H-1B visas for foreign physicians to serve in medically underserved areas, and in advising on immigration issues such as obtaining permanent residence and non-immigrant visas for foreign nurses.

Financing and Financial Restructuring/Bankruptcy

Our national Financing and Financial Restructuring and Bankruptcy practices can handle transactions ranging from routine documentation of bank loans and issuances of bond debt to complex workouts involving hundreds of secured and unsecured creditors. Members of our Hospital Subgroup work closely with our finance lawyers to address the particular nuances of lending to and, when necessary, restructuring hospital and health system businesses.

Corporate Governance

The role of hospital governing boards has taken on increasing importance as hospital trustees have gained greater responsibilities for the oversight of all of the activities that take place within the institution. This now extends to the quality of care delivered by the medical staff. In addition to their fiduciary obligations to manage the hospital in a prudent manner to ensure responsible financial oversight, hospital boards of directors must ensure that the many activities of the institution are designed to assist the hospital medical and professional staff in the delivery of patient care at a reasonable level of quality, in accord with sound financial principles. All activities of the institution and its components must also be in compliance with all state and federal regulatory and accreditation rules and guidelines. Duane Morris attorneys counsel and represent hospital governing bodies in the implementation of these duties by working with the hospital to recommend changes in governing body structures, bylaws, policies and procedures, including conflict-of-interest policies. Our attorneys often attend hospital board of trustees or directors meetings, and assist the corporate officers and administration in the presentation, analysis, and structuring of issues and proposed resolutions.

Group Presentations
  Duane Morris Special Counsel Michael E. Clark to Present at the 2015 Physicians Legal Issues Conference, Chicago, June 10, 2015
Articles Authored by Lawyers at this office:

CMS Updates 5 Star Ratings System for Nursing Homes with New Measures
Ari J. Markenson, April 07, 2015
As of February 20, 2015, the Centers for Medicare & Medicaid Services (CMS) has revised its 5 Star Rating System for nursing homes. The changes to the system involve adding two new nursing home quality measures for antipsychotic use into the Quality Measure Rating, Increasing the number of...

Lawyer in Vietnam Oliver Massmann Pharmaceutical Market
Oliver Massmann, March 30, 2015
Vietnam’s healthcare system is currently in general on the move due to the economic growth and the rapid development.

OIG - Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities
Ari J. Markenson, March 30, 2015
On January 14, 2015, the U.S. DHHS Inspector General’s Office (the “OIG”) released a report (OEI-02-14-00070) entitled “Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities.”

CMS Advises That Payment Codes on Home Health Claims Will Be Matched Against OASIS
Ari J. Markenson, March 25, 2015
CMS recently issued Transmittal SE1504 entitled “Payment Codes on Home Health Claims Will Be Matched Against Patient Assessments”.

Civil RICO Actions on the Rise to Combat Healthcare Insurance Fraud
James J. J. Ferrelli, March 25, 2015
Over the past several years, insurance carriers have aggressively pursued civil suits against doctors and other medical providers in an effort to fight healthcare insurance fraud. Besides theories of liability based upon common law claims such as fraud and unjust enrichment, insurers have more...

Consultants’ Communications Privileged from Discovery
Philip H. Lebowitz, March 25, 2015
In healthcare, companies often hire consultants to review billing and coding, privacy and security and a host of other technical issues that regular staff does not have the time or expertise to pursue. A recent discovery ruling in federal court in the Eastern District of Pennsylvania holds that...

HHS Moves to Limit In-Office Ancillary Services Exception
Matthew C. Jones, March 19, 2015
The Department of Health and Human Services (“HHS”) is once again targeting the In-Office Ancillary Services Exception (“IOASE”) to the federal Stark Law, in an attempt to produce cost savings in the U.S. healthcare system. The IOASE provides a limited exception to the Stark...

Health System Integration and Antitrust Laws on Collision Course
Philip H. Lebowitz, March 18, 2015
Health systems attempting to fulfill the mandate of integrating hospitals and physicians may find themselves accused of going too far. Although the Affordable Care Act, shared savings, gainsharing and other alternative payment methodologies have made integration of physicians, hospitals and other...

New Jersey State Bar Committee to Review RPC 1.2(d) and Issues Pertaining to Medical Marijuana
James J. J. Ferrelli, March 18, 2015
The New Jersey State Bar Association (“NJSBA”) has established an ad hoc committee to review the ethical issues raised under New Jersey Rule of Professional Conduct 1.2(d) (which prohibits a lawyer from counseling or assisting a client in conduct that the lawyer knows is illegal or...

Virtual Credit Card Payments
Patricia S. Hofstra, March 18, 2015
On January 30, 2015, several healthcare organizations sent a group letter to CMS protesting the use of virtual credit cards by health plans to pay providers. In a virtual credit card payment (a nonstandard type of electronic funds transfer EFT), a health plan or its payment vendor issues single-use...

ACOs are More Important Than Ever for LTC Facilities
Amy E. McCracken, March 13, 2015
On January 26, 2015, the United States Department of Health & Human Services (HHS) announced its timeline for shifting Medicare reimbursements from volume-based criteria to value-based criteria. HHS has adopted a framework that categorizes health care payments according to how providers receive...

Antipsychotic Drug Use Can Lower Nursing Home's Five-Star Rating
Amy E. McCracken, March 13, 2015
The Centers for Medicare & Medicaid Services (CMS) is continuing its efforts to reduce the national prevalence of antipsychotic drug use in long-stay nursing home residents. Its initial goal of a 15.1% reduction in antipsychotic drug use was met, so CMS now seeks to reduce antipsychotic drugs...

Fees and Costs Awarded to False Claims Act Defendant
Seth A. Goldberg, March 13, 2015
A recent decision in the U.S. District Court for the Southern District of New York provides fair warning to qui tam relators who assert erroneous claims under the False Claims Act ("FCA") that they could be hit with legal fees and expenses pursuant to 31 U.S.C. § 3730, which permits...

Health Care Workers May Think Twice Before Becoming a Relator
Amy E. McCracken, March 13, 2015
The Federal False Claims Act (and many similar state false claims acts) allow an individual-called a "relator"-to file a lawsuit on behalf of the United States Government. If successful, the relator stands to collect a portion of the amount collected. Since the False Claims Act provides...

Mayo Lawsuit Against Former Exec Raises Numerous Health Care and Business Litigation Issues
Elinor H. Murarova, March 13, 2015
A recent settlement between Mayo Collaborative Services d/b/a Mayo Medical Laboratories ("MML") and Mayo Clinic (together with MML, "Mayo") and a former Mayo executive, Dr. Franklin Cockerill, reveals the potential legal issues that may arise when health care executives seek new...

New CMS Payment Policy Will Negatively impact Healthcare Investors
C. Mitchell Goldman, March 13, 2015
I have been concerned about the difficulty of projecting revenue and determining valuations for new and existing healthcare companies based on risk based reimbursement models. My fears have not been allayed. Rather, they have been confirmed.

Real Estate Tax Exemption Issue Muddied Again
Philip H. Lebowitz, March 13, 2015
On December 23, 2014, the Commonwealth Court of Pennsylvania logged another frustrating mile down the confused and confusing road of property tax exemption for purely public charities. In Fayette Resources, Inc. v. Fayette County Board of Assessment Appeals, the Court overturned a lower court...

Top Three Problems with Text Messaging in Health Care Settings
Amy E. McCracken, March 13, 2015
1. Since most text messaging is not a secure form of communication, it raises HIPAA concerns if any protected health information is included in the text message. There is the possibility of a data breach in the transmission of the text message, as well as in the event of a lost or stolen phone.

FDA Issues Guidance on Registration, Fees and Reporting Requirements for Drug Compounding Outsourcing Facilities
, February 26, 2015
On November 21, 2014, the U.S. Food and Drug Administration (FDA) announced the release of three new guidance documents related to drug compounding outsourcing facilities. These documents include: