Health: Corporate & Regulatory

Health Industry


Commencing with the firm’s founding in 1981, the Health Industry practice group has provided corporate, regulatory, and civil litigation services to health industry clients, including specialized representation in regulatory and reimbursement matters, administrative and hospital medical staff disputes, and complex litigation in state and federal courts.

Our health lawyers actively practice in the areas of Compliance Plans and Investigations; Strategic Planning and Organization of Integrated Delivery Systems; Hospital/Physician Contracts and Affiliations; Joint Ventures; Mergers, Acquisitions, and Other Transactions; Managed Care Contracting; Medicare and Medicaid Reimbursement Audits and Appeals; Executive and Employee Benefits Advice; Federal, State, and Local Tax Exemption Advice and Disputes; Complex Civil Litigation and Class Actions; Employment Discrimination Litigation; Regulatory Litigation and Advice (Federal and State); Fraud and Abuse and Stark Advice; Medical Staff Privileges Disputes; HIPAA Compliance; EMTALA Compliance; Certificate of Need and Licensure; Uncompensated Care and Community Benefits Issues; Joint Commission Accreditation; and Sunshine Laws Advice and Disputes.

Today as in the past, the firm's Health Industry practice group is focused primarily upon the representation of public and private not-for-profit tax-exempt hospitals, health industry systems, medical research clinics, and hospital associations and aligned physician groups. The majority of the firm's health industry clients are located in Georgia, Florida, Alabama, and Tennessee, although the firm has also represented several national health industry organizations (e.g., VHA) and numerous tax-exempt hospitals in approximately 15 states across the nation. The firm has also represented statewide hospital associations in Florida, Georgia, Tennessee, and Texas.

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Corporate Organization and Transactions

A principal focus of the health industry practice has been the strategic planning, structuring, and implementation of acquisitions and mergers, joint ventures, integrated delivery systems, restructurings, and managed care organizations for numerous public and private not-for-profit hospitals and multi-institutional systems throughout the nation, and primarily the Southeast, including hospital and health industry authorities, tax district hospitals, and 501(c)(3) tax-exempt organizations. Additionally, the Health Industry practice group has been involved in negotiating, both from the seller’s perspective and the buyer’s perspective, numerous acquisitions of physician practices and other healthcare providers. The pace of transactional work for the firm's clients has accelerated in recent years as the health care industry has been consolidating in response to managed care, reimbursement, and environmental pressures and circumstances. These activities often bring together all disciplines of the firm, including lawyers specializing in tax, employee benefits, antitrust, insurance, physician contracting, managed care, health planning, licensure, certification, reimbursement, and Fraud and Abuse and Stark Law prohibitions, as well as the corporate practice team.

Contact: Paul L. Hudson, David G. Cleveland ,Jennifer M. Vaughan
or Sean E. Fennelly

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Regulatory and Compliance

The Health Industry practice group’s Medicare/Medicaid reimbursement practice is national in scope, with client representations from coast to coast. The Health Industry practice group has represented numerous clients at the administrative level in hundreds of audits, validation reviews, and settlement negotiations with CMS, Part A intermediaries, Part B carriers, and state Medicaid agencies; in pursuing Freedom of Information Act Requests; and in controversies before the PRRB, Departmental Appeals Board, administrative law judges, and fair hearing officers. One current area of concern for the hospital industry involves Medicare RAC audits and appeals.

The Health Industry practice group has also successfully handled substantial reimbursement litigation in federal trial and appellate courts and before state administrative law judges, as well as Medicare and Medicaid certification/decertification and scores of EMTALA enforcement actions nationwide.

Contact: Jonathan L. Rue

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Compliance matters represent an important and growing area of the Health Industry practice group’s services. The Health Industry practice group regularly assists clients in developing and operating regulatory compliance plans and programs and in responding to criminal and civil investigations. Members of the firm, several of whom previously served as Assistant U.S. Attorneys and state prosecutors, have represented a variety of providers in civil and criminal investigations brought by federal and state regulators, including federal enforcement initiatives brought by the Office of Inspector General of the Department of Health and Human Services and the Department of Justice. The firm has also represented and advised providers in connection with False Claims Act litigation, including qui tam cases. In connection with these matters, members of the firm have conducted internal investigations and successfully managed voluntary disclosures to various enforcement agencies in circumstances of major importance to our clients. As an example, following a favorable resolution of one of the major investigations, the U.S. Attorney's Office in Atlanta (responsible for enforcement actions in the Southeastern states) and the OIG expressly praised the client's compliance program which the Health Industry practice group assisted in developing as a "national model." Finally, the Health Industry practice group has advised providers on compliance with the expanding HIPAA patient confidentiality regulations.

Contact: Robert M. Brennan or Jonathan L. Rue

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Members of the Health Industry practice group have counseled with clients on Certificate of Need matters throughout the South and in other regions of the country. The firm has extensive experience over a 28-year period in working with health planning agencies and in administrative litigation and judicial appeals of health planning controversies. The firm has litigated hundreds of certificate of need matters involving virtually every type of regulated project and service, with success in a vast majority of cases, and has counseled clients on many more projects that were approved without litigation. The number of certificate of need disputes litigated by the firm in Georgia and Florida, in particular, is unequaled by any other law firm in those states.

Contact: Armando L. Basarrate or John H. Parker

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The Health Industry practice group has represented hospitals and other institutional providers in a variety of licensure matters. Frequently, licensure issues arise in connection with acquisitions, construction projects, and restructurings undertaken by clients of the firm. The firm has successfully resolved several major licensure complaints in an expedited manner. The Health Industry practice group has also represented hospitals and health systems undergoing Joint Commission accreditation surveys. These matters have included successful appeals on behalf of hospitals facing a preliminary denial of accreditation.

Contact: Jonathan L. Rue or Armando L. Basarrate
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The Health Industry practice group includes lawyers specifically trained and experienced in all facets of tax planning and controversies for health industry organizations. Members of the team have represented numerous tax-exempt organizations, including major medical teaching institutions, community-based hospitals, and medical and research foundations in seeking rulings and determination letters and in unrelated business income controversies, at all levels of the Internal Revenue Service. Other matters handled for such organizations have included sales and use tax, ad valorem tax, and employment tax disputes. The Health Industry practice group has also advised tax-exempt health systems in several states regarding the scope of permissible lobbying and political campaign activities, directly or indirectly through affiliated for profit entities.

Contact: John H. Parker or David G. Cleveland
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The health care industry has been the most fertile source of federal antitrust activity since the early 1980’s, and the Health Industry practice group includes lawyers specifically trained and specializing in antitrust matters affecting the health care industry. Antitrust concerns arise in the context of acquisitions, mergers, and joint ventures; PPO’s, PHO’s, and managed care plans; medical staff disputes; and health planning. The firm has represented clients in each of these areas throughout the Southeast, both in counseling and in complex litigation.

Contact: J. Marbury Rainer
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Insurance regulation in Georgia and Florida is also a focus of the firm’s health law practice. The Health Industry practice group has represented numerous health industry systems in forming HMO’s and other managed care organizations, and it has successfully represented clients in major regulatory disputes with insurance departments. The Health Industry practice group also organized and represented the founding hospital members of the first statewide HMO in Georgia.

Contact: Paul L. Hudson or Jennifer M. Vaughan
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Uncompensated Care and "Community Benefits"

Issues surrounding the nature and level of charity care and other community benefits provided by tax-exempt hospitals are central to a wide variety of counseling services, studies, and litigation matters with which the Health Industry practice group has extensive experience in Georgia and throughout the nation. The Health Industry practice group has represented the Georgia Alliance of Community Hospitals, as its general counsel, and numerous large tax-exempt hospitals and health systems throughout Georgia in connection with a host of issues related to uncompensated care and community benefits. Those efforts include lobbying efforts before the Georgia General Assembly, Indigent Care Trust Fund disputes, and hundreds of CON disputes centered around the issue of financial accessibility. Similarly, the firm served as counsel to the Association of Voluntary Hospitals ("AVHF"), before that voluntary hospital association was merged with the Florida Hospital Association, in connection with state efforts to develop and implement regulations regarding the definition of "charity care" for PMATF (indigent care trust fund), HCCB (rate setting), and sales tax purposes. That definition remains in effect. The Health Industry practice group also has represented AVHF, the Florida Hospital Association, and numerous individual tax-exempt hospitals in administrative disputes surrounding those regulatory programs. Charity care issues have also often been hotly contested in many of the scores of CON cases the firm has litigated in Florida over the past 25 years.

A related, specialty service of the firm has been to advise national (VHA) and statewide (Georgia, Florida, Tennessee, and Texas) not-for-profit hospital associations and individual hospital clients as to “community benefits” issues. The Health Industry practice group has authored and co-authored several community benefits studies quantifying and comparing the community benefits afforded by not-for-profit versus for-profit hospitals, which have received considerable national attention and have been the subject of testimony by firm members in several state legislatures, Attorney General hearings, and local public hearings throughout the nation (e.g., Alabama, California, Florida, Georgia, Massachusetts, Michigan, and New Mexico). Those studies included an analysis of all federal, state, and local taxes paid by the different hospital sectors; quantified the value of not-for-profit hospitals’ exemptions from taxes; and quantified and compared the value of community benefits afforded by the tax-exempt hospitals. Individualized comparative studies of this nature have been prepared for our not-for-profit hospital clients, including many in Florida and Georgia, for their own community benefits reports and in challenging local bids by for-profit hospital chains to acquire and convert not-for-profit hospitals.

Currently, the firm is advising clients concerning new federal "community benefits" reporting requirements as to Forms 990 reported by tax-exempt hospitals to the Internal Revenue Service, and related concerns being raised in several state legislatures.

Contact: John H. Parker or David G. Cleveland
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Complex Litigation

The Health Industry practice group, sometimes working jointly with the firm's general Litigation team, has represented health industry clients in state and federal courts and arbitration proceedings in a wide variety of complex civil litigation matters involving, for example, contract, non-compete, tortious interference, medical staff, fraud and RICO, employment discrimination, defamation, acquisition agreement, compensation, and Sunshine Laws disputes. The firm successfully defended one of the very first class action suits initiated by the Scruggs Law Firm against not-for-profit hospitals nationwide with respect to billing uninsured patients, ultimately prevailing both in federal court and in the Georgia appellate courts. The firm has been successful in disposing of a wide variety of class action claims brought against its clients at an early stage. Many of the firm's litigation successes have established important new precedents. For example, the only court judgment in Georgia holding that a tax-exempt not-for-profit health industry system parent entity and other non-hospital entities are not subject to the Sunshine Laws was secured on behalf of a client of the firm. A leading federal appellate court decision holding that a certificate of need opponent which intentionally provided false information to state regulators was not immune from a federal antitrust claim is yet another example of the Health Industry practice group’s many litigation achievements. The firm has also been engaged to file numerous amicus briefs on behalf of several national and state hospital associations in a wide variety of cases involving issues important to the health care industry.

Contact: Robert M. Brennan or John H. Parker
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