4 of the most pressing healthcare legal issues

From a new theory of liability under the False Claims Act to payers targeting certain providers over reimbursements for allegedly improper practices, hospitals and health systems are facing a number of legal issues.

During an Aug. 24 webinar hosted by McGuireWoods and moderated by Scott Becker, partner at McGuireWoods and publisher of Becker's Healthcare, speakers discussed the following healthcare private equity, litigation and regulatory trends.

1. Implied certification theory. In June 2016, the U.S. Supreme Court issued a decision in Universal Health Services v. Escobar, which broadened the scope of the False Claims Act. "By virtue of this theory, if a healthcare provider is out of compliance with statute or a CMS regulation that is being found to be a basis for false claims exposure," said David Pivnick, partner at McGuireWoods with a primary emphasis in healthcare litigation. Parts of the Supreme Court's opinion in Escobar are vague and subject to interpretation, which has lower courts wrestling with how to implement the new theory of liability. "This is where the biggest hotbed of healthcare False Claims Act litigation is going to be," said Mr. Pivnick. 

2. Payers targeting providers for reimbursement. In recent years, several commercial payers have aggressively targeted certain provider organizations for reimbursement of benefits paid out for allegedly improper practices, according to Jeff Clark, partner at McGuireWoods with a primary emphasis in healthcare litigation. Courts have issues inconsistent decisions in these cases because this type of action is still new. "Even when the factual circumstances are nearly identical and the same law is applied, judges are grappling with this," Mr. Clark said.

3. Compliance issues. With healthcare transactions being structured in new and more complicated ways, it is increasingly difficult to ensure transactions comply with all federal statutes, including the Anti-Kickback Statute, Stark Law and the False Claims Act. "Private equity investments are making these transactions much more complicated," said Gretchen Townsend, partner at McGuireWoods whose practice focuses on corporate healthcare transactional work and regulatory matters. Because the False Claims Act can be "potentially catastrophic" to a healthcare organization, many providers are becoming much more attuned to compliance issues, she said.

4. Private equity investment in healthcare. The healthcare system is slowly migrating toward value-based medicine, and the move has the attention of private equity firms. "I'm seeing a steadily growing interest on the private equity side in how to be an investor in value-based medicine," said Geoff C. Cockrell, partner at McGuireWoods and chair of the firm's private equity group. He said private equity funds are buying up primary care practices and looking for other ways to benefit from the transition to value-based medicine.

More articles on legal and regulatory issues:

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Operators of nearly 300 cancer treatment centers accused of illegally dividing up Florida market
Former director of finance charged with embezzling $1.5M from UNC hospital

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