Shining the light on physician-pharmaceutical and medical device industry financial relationships.

Long subject to legal scrutiny under the federal Anti-Kickback Statute, financial ties between physicians and drug manufacturers have recently come under additional pressure as a result of recently enacted state and federal disclosure laws and state gift restrictions, the latest coming in connection with the Federal Health Reform Law. These "sunshine" laws have been motivated by the concern that gifts and payments by manufacturers to physicians may lead to conflicts of interest and improperly influence physicians in their drug- or device-prescribing decisions. As a backdrop to these new laws, it is helpful to review prior guidance regarding manufacturer-physician financial relationships, both from the federal government and the industry itself. These laws do not prohibit physician involvement with industry in research and education, but they impose various new compliance requirements on these relationships, and also in many cases, require public disclosure of arrangements that previously were treated as confidential. It is still too early to tell if these laws will stifle innovation, but they do require a heightened degree of diligence to avoid, at a minimum, adverse publicity and embarrassment and, at worst, criminal and civil liability.

Specialized due diligence called for on Medicare/Medicaid issues in health care acquisitions.

A careful and comprehensive due diligence process is mission-critical to the success of any complex business acquisition. In heavily regulated industries such as health care, a buyer's greatest risks can arise from practices relating to Medicare, Medicaid, and other governmental payors. In particular, the rules of "successor liability" for the seller's sins are fundamentally different in a health care transaction than in other traditional corporate acquisitions. These liabilities may attach not only for expected business debts, but also for unexpected and draconian penalties available as remedies under the False Claims Act, Civil Money Penalties Law, and a number of other enforcement authorities. In addition, because critical cash flow depends on accepting certain liabilities of the seller, in the health care context these risks may be voluntarily assumed. Thus, here, due diligence is not just about finding "deal breakers," it is about helping the provider's management team understand the financial and risk-management components of the transaction at hand.

Legal, policy, and practical perspectives on hospital discounting and collection policies for uninsured and underinsured patients: a primer for board members and managers.

This article addresses many of the issues hospital boards and management must consider with regard to discounting and collection policies for uninsured and underinsured patients. Viewing these issues from the perspective of the overall charitable mission of the hospital will allow a hospital to respond more to community need than fear of lawsuits or adverse publicity. The legal and reimbursement consequences of any course of action must, however, be assessed by hospitals and their advisors.

Health care M&A advisory alert: Delaware court decision illustrates importance of specialized due diligence on Medicare/Medicaid issues in health care acquisition.

Lawyers and clients contemplating a health care transaction must have a strong working knowledge not only of the applicable law, but also of the provider's needs and culture. As illustrated by a recent Delaware court decision, Interim Healthcare, Inc. et al. v. Spherion Corporation, parties engaging in health care provider acquisitions are well advised to select a team of experienced business and legal advisors with specialized knowledge in health care practices that can find and address any suspicious activities before it is too late.