Why Health Care Providers and Administrators Need to Partner with Health Law Attorneys (2004)

From the family doctor and community hospital whose patients paid in full, health care in the United States has morphed into a trillion dollar complex and heavily regulated industry regularly featured in the news media. As the health care industry has grown and diversified, so too has the legal specialty of health law to meet the wide-ranging yet specialized needs of the industry and those who come in contact with it. Successfully operating within the health care industry requires an understanding of the interplay among the industry's main components: health care facilities, practitioners and finance.

Health Care Facilities
Health care in the United States historically has been delivered in the home, physician offices, hospitals and nursing homes. But competition for reimbursement by the various health care industry players and the need for capital to finance expensive, cutting-edge technology have contributed to the proliferation of new and hybrid health care facilities such as ambulatory surgery centers and specialty hospitals.

Health Care Practitioners
General family physicians and nurses traditionally were the main health care practitioners. Today, both categories of practitioners have greatly expanded, with widespread and increasing degrees of specialization in each. There has also been a large increase in the number of non-physician practitioners such as physicians' assistants, therapists and technicians. These new categories of practitioner raise complicated issues regarding supervisory requirements, and billing and reimbursement rates.

Health Care Finance
Health care finance used to consist primarily of charity care and fee-paying patients. Health care spending in the United States currently amounts to over $1 trillion dollars, which is nearly 15% of the United States gross domestic product. Mushrooming health care expenses and spending have caused health care finance now to mean management of costs. Some of the reasons for the cost increases include: 1) advancements in technology, 2) improvements in the quality of services, 3) an aging population, 4) overutilization of health care services, 5) costly excess capacity and 6) defensive medicine to "cover every base" in light of medical malpractice lawsuits.

Every health care provider and Administrator is aware of the reimbursement crunch from health care payers, whether the payers are government programs, private insurance or self-paying patients. In addition to effectively capping reimbursement amounts, these payers have constructed veritable slalom courses for health care providers and Administrators to navigate, such as Medicare and Medicaid fraud and abuse laws, federal and state self-referral prohibitions, criminal insurance fraud laws that apply even when the health care entity does not participate in a particular insurer's network, and charity care and uniform charge issues that apply to tax-exempt facilities.

Why a Health Law Attorney?

The issues that each of the three components, facilities, practitioners and finance, have are general legal issues; however, a lawyer specializing in health law will be able to put such issues into context and understand the particular constraints of the industry.

A good health law attorney will have general practice experience with business entity formation, partnership or membership issues, real estate transactions and leases, employment law, and general contract law. However, he or she will also have an additional understanding of the intricacies of federal and state regulations applicable to the health care industry. This understanding encompasses licensure and accreditation issues, fraud and abuse laws, medical record and privacy regulations, regulations regarding treatment and billing and reimbursement issues. This background positions most health law attorneys as the most effective negotiators of contracts between industry players.

A health law attorney is also critical to assisting a health care provider or Administrator with day-to-day operations and their myriad of responsibilities. Those responsibilities include mandatory reporting of abused patients, professional misconduct, enforcement of noncompete covenants, compliance programs and audits and issues with medical records such as informed consent documentation and patient privacy rights.

While the thicket of regulations may seem daunting to anyone, knowledge of such regulations and of current trends in the industry makes a health care attorney an invaluable partner for long-term viability and competitive advantage. Such viability and competitive advantage may involve forming strategic alliances with other health care providers, medical equipment or pharmacy companies, practice management and software companies. Some of the current trends in increasing health care entity income streams are physician/hospital joint ventures to establish a new facility such as an ambulatory surgery center or provide management services to an existing practice or facility; quality-based incentive bonuses; and physician participation in clinical trials outside of academic medical centers.

Finally, health law attorneys are also trained to assist when things go wrong and issues
arise involving medical malpractice, government audits and representation of practitioners before administrative entities, mediation and arbitration.

November 2004 - This Article is for information and discussion purposes only. It does not constitute the rendering of legal advice or opinion and is summary in nature. For further information, please contact us at (845) 565-1100.

© 2004 TCLM&M All Rights Reserved. No part of this Newsletter may be used or reproduced without the written permission of TCLM&M.