On November 15, 2024, the California Board of Pharmacy issued a public notice of its intent to modify Cal. Code Regs. tit. 16 § 1708.2, which governs the discontinuation of pharmacy businesses in California. The regulation currently states:
“Any permit holder shall contact the board prior to transferring or selling any dangerous drugs, devices or
On August 31, the last day of its 2024 Legislative Session, the California Legislature approved Assembly Bill 3129 (Wood), which provides for notification to and review by the Attorney General of health care transactions involving private equity groups and hedge funds. This bill has been subject to intense lobbying, and its scope changed significantly in the month leading up to its passage. Governor Newsom is expected to sign the legislation in September. It is worth a comprehensive look at the final version of the bill, which will have a significant impact on future private equity transactions in California.
Engaging in management and investor conversations about maintaining and growing a business is critical, no matter the industry. Whether you’re discussing normal business sustainability, organic growth, or contemplating a sale, these discussions become more complex when practicing physicians are the business’s revenue generators. These conversations must be handled carefully to comply with the spirit and letter of healthcare’s strict fraud and abuse laws. To ensure these discussions are both productive and compliant, it’s essential to navigate these complex regulations effectively.
Exiting a business, whether you are a serial entrepreneur looking to move on to the next project or a healthcare provider like a physician or therapist who has nurtured your practice for decades, can be difficult. After all, corporate transactions are complex affairs that often hang on small details. That’s to say nothing of the emotions that business owners sometimes experience when stepping away from an enterprise into which they have poured their sweat and passion.
For those in the healthcare industry, the complexities only get tougher to tackle. As one of the most heavily regulated industries, healthcare embodies a level of regulatory risk—from merely annoying to existential—that most businesses don’t have to contemplate, making succession and exit plans hard to develop and harder still to execute.
The plan of a healthcare consulting firm (the “Firm”) to give gift cards to physicians in exchange for referrals to new customers does not violate the Federal Anti-Kickback Statute (the “AKS”), according to an Advisory Opinion from the U.S. Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”). The Firm provides practice optimization services including data analytics services, electronic health record consulting services, compliance monitoring, and assistance with Merit-Based Incentive Payment System (“MIPS”) performance measures and submissions. Importantly, the Firm does not provide any services, nor does it invest in or own any other entity that provides services, that would be paid for, in whole or in part, directly or indirectly, by a Federal health care program.
Under the proposed plan, the Firm would give current customers $25 gift cards in exchange for recommending its consulting services to other physicians. If the recommendation were successful, the recommender would receive an additional $50 gift card.
Contract management has quickly and importantly developed into an area of focus for in-house counsel and business stakeholders. Effective contract management systems can increase internal accountability and decrease wait times and costs. Further, increased ownership and investment in the maintenance of contractual obligations allows for companies to better track data, including dollars spent, time spent, and results to report to key stakeholders. Given the benefits of effective contract management programs, it is unsurprising that leaders look to develop and implement their own contract management system.
Please join Husch Blackwell as we go virtual with our Health Law Conference. The series will include a range of important topics relevant to the healthcare industry and will be moderated by Curt Chase, leader of the firm’s Healthcare, Life Sciences and Education team; Hal Katz, American Bar Association, Health Law Section, Chair; and Tom Shorter, American Health Law Association, President-Elect Designate. The webinar programs will be offered every Thursday through November 19.
Deal activity among hospitals, physicians and health plans will continue at a swift pace into 2021. In our fifth session, hear from industry thought leaders on how the pandemic is impacting private equity and strategic investments in the healthcare space.
Private equity buyers have become a significant player in the healthcare M&A space and they continue to focus on those types of healthcare services that have the greatest opportunities for aggregating. Traditional health system buyers have continued to focus on which physician specialties will assist most with alignment and care coordination strategies. While there are many similarities in transactions with these two types of buyers, there are often just as many differences. The following examples illustrate how those interests may vary:
This is the second article in our series on “Closing a Private Equity Transaction.” As discussed in “Part I,” advance preparation is critical to getting a deal done. Once preparation for a potential transaction is complete, and an interested buyer or investor is identified, the parties will proceed with negotiating a letter of intent (LOI).
With a few exceptions (which are mentioned below), the LOI is a nonbinding document, but should include those terms essential for both parties to close the transaction. This is the moment when the parties will be in the best position to ensure that the time and expense that will be required for negotiating a definitive purchase agreement will be justified. Such terms can include:
To increase the likelihood of ultimately closing a transaction with a private equity investor or buyer, the key is preparation. Preparation is divided up into several steps.
First, before seeking a potential investor or buyer, the owners of the business should go through a semi-formal process to confirm the owners and key members of the business have shared, or at least compatible, motivations and priorities in a pursuing a potential transaction (e.g., capital for improving or growing the business, building a brand, creating value for a future exit, or cashing out). This will allow the business to focus on those investors/buyers with aligned expectations, and ultimately gain the required approval to close a transaction from the owners and key members of the business.