Implementing Health Care Law to Create New Work for Firms

Matthew Huisman

The National Law Journal

02-13-2013

When President Obama signed the Affordable Care Act into law, he sought to provide more Americans access to health care and, perhaps unwittingly, opened up a pipeline of activity for attorneys.

While health care has been a steady practice at D.C. firms, the law created more work on the regulatory, transactional and enforcement fronts. Attorneys expect a flood of business on the topic in 2013 — work that may stick around for some time.

"I think it's more than a trend," said Jeffrey Jacobovitz, co-chairman of Arnall Golden Gregory's antitrust group. "I would expect to see more investigations, as that is one way to counter increasing medical costs."Federal regulatory agencies are expected to be a major focus, due in part to a new enforcement weapon for the government to root out fraud. One of the provisions of the health care law amends the False Claims Act and provides the government a tool to seek damages against health care providers that fail to return Medicare or Medicaid overpayments. The provider has 60 days after the time of discovery to refund excess payment, or it opens the door to claims.

"The 60-day rule, in conjunction with amendments to the False Claims Act, will give the DOJ an extra tool to prosecute," said Mark Polston, a King & Spalding health care partner. "This will empower the DOJ to become more aggressive in the prosecution of health care fraud."

Attorneys note that one major reason for aggressive government enforcement will be to help offset some of the costs of the new health care system. "It was clear that health reform would be funded in part by President Obama's initiative to root out health care fraud," Susan Berson, the D.C. office managing member of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, said.

The government isn't the only party that can bring these actions. Whistle­blowers also have used qui tam actions to initiate litigation, which in turn can attract the attention of federal attorneys.

"Agencies have become more aggressive in the health care fraud and abuse areas," Jacobovitz said. "Moreover, there are more qui tam actions that have been filed in which the government can intervene."

THE SUNSHINE BOYS

On February 1, the Centers for Medicare and Medicaid Services issued a final rule for the Physician Payment Sunshine Act, which requires drug, device and medical supply manufacturers to disclose payments to physicians and teaching hospitals.

Berson said the Sunshine Act rule was the latest in a continuing number of guidelines, the meatier of which are set to be issued in 2014. "I think now, everyone is ramping up to comply with what was finally announced," she said.

That compliance is important for clients that want to avoid federal investigations and enforcement.

Kevin Kroeker, a Los Angeles-based health care partner at Crowell & Moring, said that health care transactions and mergers and acquisitions have been particularly active. He said that clients are seeking a revised business model to match a new health care system. "All of them are talking amongst themselves as to what is the best way to operate in a new health care world," Kroeker said. "This has created a lot of interesting work for lawyers advising these clients to meet regulatory requirements and help satisfy their business goals."

Kroeker said California has been an early supporter of the Medicaid expansion program, which allows states to choose their own involvement. The state, he said, has invested lots of time and resources to comply with the pending change. Kroeker added that, as the deadline approaches and more states decide whether to join the federal program or go it alone, states will seek outside counsel. "This year is going to be a very busy year in terms of evaluating new regulations and advising clients," he said. "My expectation is that the work for lawyers doesn't go away once the laws are on the books — it just shifts into a different gear."

UNCERTAINTY IN SPECIFICS

Jason Caron, a partner in McDermott Will & Emery's D.C. office, agreed that the next few years would keep lawyers busy. "My sense is that while there is a lot going on this year and the next year, I don't see that changing," he said.

Gregory Luce, a health care litigation partner at Skadden, Arps, Slate, Meagher & Flom, said, "It's a little hard to measure to what degree an act whose principal parts have not been fully implemented will affect the volume of legal work." Nonetheless, he observed, "Particularly in the enforcement arena, there are several things that have engendered work. The amendment to the False Claims Act will have some substantial impact for those that have regulatory work like we do."

With the flurry of activity, firms are on the prowl for talent. Ed Lee, the founder of legal recruiting firm Whitehaven Strategies, said that people with experience in government enforcement are in particularly high demand. "If you have good, legitimate legislative chops, there is always room at firms," he said.

"At my firm, we have been very busy as a result of the Affordable Care Act," Polston of King & Spalding said. "We don't anticipate that it will go away anytime soon. That is a growth area and we are interested in continuing to grow in that space."

This article originally appeared in The National Law Journal.