Health Care Transactions

Following New York State Governor Kathy Hochul’s proposal in February of this year (see our previous alert), the New York legislature passed and Governor Hochul signed a law on May 3, 2023, which significantly increases the state’s focus and visibility into physician practice management change‑of‑control transactions.[1] New York’s statute reflects a growing trend of states taking note of transactions that previously were not regulated by state administrative agencies. As we await the promulgation of regulations from the New York State Department of Health (“DOH”), we examine here how New York’s law compares to similar laws in other states, and describe precautions that operators in the physician management space — as well as those who do businesses with such operators — should take to safeguard themselves against major disruptions to operations.
Continue Reading New York’s New Notice Requirement for Practice Management Deals Demonstrates a Trend That Should be Carefully Watched

On July 27, 2023, California’s Office of Health Care Access and Information (the “Office”) released its long-awaited proposed regulations on the notice requirements for material health care transactions in California. The anticipated regulations follow the passing of SB 184 on June 30, 2022, which, in part, created the Office and granted it the authority to collect and analyze data related to health care costs, specifically via monitoring mergers and acquisitions in the health care industry. Following the lead of states like New York, whose wide-range health care transaction requirements were discussed in a previous blog post, California seeks to address the increasing costs of health care services by imposing significant notice and review requirements for mergers and acquisitions beginning in 2024.
Continue Reading California Releases Proposed Regulations on Health Care Transaction Notice Requirements

On February 1, 2023, New York Governor Kathy Hochul announced the 2024 Executive Budget. As alluded to in the Governor’s State of the State address, and as described in an earlier Proskauer Health Care Law Brief article, the Governor is proposing to adopt a wide-ranging approval requirement for health care transactions that appears to target investor-backed physician practices.

The legislative proposals related to health care, as contained in the Governor’s budget, were introduced as Senate Bill 4007 and Assembly Bill A3007. The bills propose to amend the Public Health Law (“PHL”) to introduce a new Article 45-A, named “Review and Oversight of Material Transactions.” See 2023 New York Senate-Assembly Bill S4007, A3007, Part M § 5.Continue Reading 2024 New York Budget Proposes Wide-Ranging Transaction Approval Requirement That Targets Private Investment in Physician Practices and MSOs, and Permits DOH to Extract Concessions

We previously noted that the regulations implementing the No Surprises Act (“NSA”) appeared to be inconsistent with the NSA because they seemed to establish the qualifying payment amount (“QPA”) as the appropriate payment amount to be used in arbitrations by certified IDR entities (viz. the regulation-established independent dispute resolution (“IDR”) process) between plans and providers, and that the United States District Court for the Eastern District of Texas (“Texas District Court”) vacated portions of the NSA regulations relating to the QPA for purposes of the IDR process.  The Federal government recently responded to the Texas District Court—by removing such portions of the NSA regulations.
Continue Reading The Saga of the No Surprises Act Continues to be … Surprising

A variety of conditions may be conspiring against businesses in certain segments of the health care industry.  These include reduced patient census at skilled nursing and other long-term care facilities, COVID regulations that limit the ability of providers to give (or patients to receive) various forms of treatment and patients choosing to delay lucrative elective

In an advisory opinion posted November 10, 2021 (AO 21-15), the Office of the Inspector General of the United States Department of Health and Human Services (OIG) appeared to soften a disturbing position that it had taken in 2012 regarding the employment safe harbor.

The issue is the breadth of the employment safe

In the last few years, we have seen an uptick in behavioral health groups focused on psychedelic treatments.  There are now at least five (5) psychedelic-assisted therapy platforms traded on NASDAQ with numerous others listed on the Toronto Stock Exchange and elsewhere.[1]  Ketamine treatments, in particular, have garnered considerable attention from patients, providers and investors.   Treatment models range from more traditional psychotherapy and infusion services similar to those offered by Columbia University[2] to telemedicine-enabled psychotherapy coupled with mail-delivered tablets of ketamine under the Mindbloom model.[3]  However, despite the growth in adoption, Ketamine remains a controlled substance and ketamine behavioral health remains an industry with material regulatory risks.

We have set forth certain key considerations for various stakeholders involved with ketamine behavioral health.
Continue Reading Key Legal Considerations Relating to Ketamine Behavioral Health Platforms

JAMA Internal Medicine recently published an article finding that the number of homebound adults aged 70 or older more than doubled during the last decade. In 2011, approximately 5% of adults aged 70 or older were homebound compared with 13% in the same age group in 2020. The authors indicate the steep incline in 2020 was likely due to social distancing restrictions and other health precautions taken over the course of the COVID-19 pandemic. But the high number of homebound adults aged 70 and older will likely continue throughout 2021 and have potential lasting effects on the overall health of the individuals and their health care delivery.

While telehealth has become a staple in the lives of many post-pandemic (as discussed in a prior blog post), it may not be reaching this vulnerable population. The JAMA article indicated that, of the survey respondents, 27.8% did not have a cell phone, 50.8% did not have a computer, and more than 50% did not email, text or go online in the last month. This means those in this population that need assistance with health care services may need to rely on in-person home care.
Continue Reading Home Is Where the Health Care Is: New Study Shows Increase in Number of Homebound Older Adults While CMS Expands Home Health Reimbursement Model

Given the current political dynamic within Congress, the chances of the Biden Administration enacting significant, substantive health care legislation appear slim in the short-term. Thus, the Biden Administration has sought alternative routes to advance its policy priorities, mainly through budget reconciliation (see here for a comprehensive explainer from the Congressional Research Service) and agency regulation. For example, we have previously written here and here about the “No Surprises Act”, enacted through the legislative short-cut of budget reconciliation as part of the 2021 Consolidated Appropriations Act, and the Biden Administration’s new regulations implementing consumer protections against surprise medical bills. In this mold, President Biden’s July 9 Executive Order on Promoting Competition in the American Economy (the “Order”) appears to lay out an aspirational, yet somewhat more practical agenda to implementing reforms in the health care sector, as compared to relying on new legislation coming through Congress.

The Order tasks federal agencies across the “whole-of-government” to “protect competition in the American economy” by acting on 72 regulatory initiatives, to be coordinated by a newly established “White House Competition Council” with representatives from key federal agencies. While the “whole-of-government” is involved and the entirety of the U.S. economy is targeted, there is a distinct focus among these initiatives on “improving health care” by addressing “overconcentration, monopolization, and unfair competition” in the sector. The Order specifically cites four areas in the health care sector ripe for renewed enforcement and regulatory attention with the goal of lowering prices, promoting competition, and benefiting consumers.
Continue Reading Pass Go and Collect Regulatory Scrutiny: The Biden Administration Takes Aim at Consolidation & Anti-Competitive Business Practices in Health Care

Cardiology procedures in the ambulatory surgery center (“ASC”) setting are growing rapidly.  According to MedPAC’s March 2021 report to Congress, there were 88 single-specialty cardiology ASCs billing Medicare in 2019 (the latest year with reportable data), which is a significant uptick from just 18 such ASCs in 2017.[1]  Despite demonstrable growth, it is important to note that this growth is occurring from a smaller base relative to other single-specialty ASCs.  For example, there were more than 1,000 gastroenterology ASCs in 2019.[2]  However, while ASCs accounted for an estimated 10% of all cardiology procedures in 2018, Bain & Company expects that they will account for 30-35% of such procedures by the mid-2020s as lower costs and favorable outcomes drive change.[3]
Continue Reading Key Considerations for Cardiology Procedures in the ASC Setting