SIGNING UP: Health care applicants line up outside an SEIU-United Health Care Workers West ­building in California last month. March 31 marked the open enrollment deadline under the ACA.
SIGNING UP: Health care applicants line up outside an SEIU-United Health Care Workers West ­building in California last month. March 31 marked the open enrollment deadline under the ACA. (Photo: AP / Ringo H.W. Chiu)

Washington law firms are reassessing how they structure their health care lobbying practices this year, as the industry expands to implement the Affordable Care Act and the government continues to tinker with Medicare.

McDermott Will & Emery, which has one of the largest health law practices in the country, announced last week that it would move its five health care nonlawyer consultants and tie lobbyist-lawyers to a new subsidiary, McDermott+Consulting. In 2013, more than half of the firm’s $5.7 million in lobbying revenue related to health care, according to federal disclosures.

Two additional firms, Patton Boggs and Wiley Rein, said they’ve also considered reorganizing their business models in health care public policy.

“That is something that I think every law firm in the city is going to be debating,” Wiley Rein’s Jim Slattery said. “That is, whether the law firm accounting model fits the public policy consulting world. That is a debate that’s going on for a number of years. Candidly, it’s very ­difficult to make the law firm model fit the public policy model.”

What McDermott did, in some ways, boils down to a marketing technique for a roiling industry. Partner and McDermott+Consulting principal Eric Zimmerman described how he had watched health care clients hire multiple professional-service providers — from lobbying shops to analysts to legal ­services.

“This is a service that McDermott has provided for quite some time,” Zimmerman said. “What’s new is setting it up as a distinct business enterprise, with a special focus on these particular services.”

The spinoff, informally called McDermott Plus, also may remove the stigma for clients dubious about the billable hours that come with hiring a law firm. While the firm offers alternatives to billable hours, the traditional legal billing structure is “not always attractive to ­clients needing these services,” Zimmerman said.

Epstein Becker & Green formed a separate company about eight years ago to work in health care consulting. That company now does a majority of its work on U.S. Food and Drug Administration regulation.

“I had to smile when I saw the press release. It sounded very similar,” said Bradley Merrill Thompson, an Epstein member and president of EBG Consulting Inc.

The consulting firm — which uses another Epstein spinoff, National Health Advisors, for lobbying — has seen its business revenue go up and down over those years, as projects began and closed. The key to the business is its ability to scale its employee roster through contractors, Thompson said.

McDermott’s health care lobbying practice focuses on three of the four main industry groups in health care, with the exception of insurance providers, Zimmerman said.

But even lobbyists who work primarily with insurers see opportunity.

UNPRECEDENTED UNCERTAINTY

“I have never in my time here in Washington seen an industry that is dealing with this kind of uncertainty,” said Slattery, who chairs Wiley Rein’s public policy group and lobbies for health care interests, especially insurers.

The group brought in almost $4.4 million during 2013, according to congressional disclosures, with almost 20 percent of that revenue from health care. His group’s health care work has grown by approximately 10 to 15 percent each year since about 2010, the former congressman said.

Not all of Slattery’s practice involves presenting ideas to Congress. Because of the broad authority agencies enjoy in interpreting and enforcing health care laws, Slattery said, his clients demand information as much as advocacy. He and his team report to clients on the activities of the Centers for Medicare & Medicaid Services or the U.S. Depart­ment of Health and Human Services.

The McDermott announcement on April 2 came amid considerable buzz in Washington about the Obama administration’s success in meeting its goal of enrolling more than 7 million health insurance customers under the Affordable Care Act. The health care reform debate had unleashed a wave of millions more dollars on lobbying. That business has stabilized, but there’s still work for lobbyists, especially concerning possible revisions to Medicare.

And there are clients to represent before regulatory agencies. For instance, the federal government could consider rewriting an eligibility standard for Medicare reimbursements. Even a subtle change could mean millions of dollars in payments to a health care provider. Moreover, agencies including the Centers for Medical & Medicaid Services or the U.S. Food and Drug Administration issue new regulations frequently. Sometimes these rewrites can be sweeping in their scope.

‘PRETTY BIG SHIFT’

“It’s been a pretty big shift in the amount of lobbying directed at getting Congress and the White House involved in the regulatory [agencies],” said John Jonas, founder of Patton Boggs’ health care group. “That’s certainly over the last couple of years, and it’s a process that’s accelerating.”

Patton Boggs has discussed hiring consultants on health care public policy and arranging a different pay scale for them in a subsidiary, Jonas said. Although the firm has been downsizing for about a year, it has made no cuts other than through attrition to its 17-person health care group, he said. Of Patton Boggs’ $40 million in disclosed domestic lobbying revenue in 2013, about 20 percent was tied to health care.

The business is strong, Jonas added, because the health care industry has many players and is marked by churn, whereby a new company may form around a new technology or process. “That’s very good for people looking to represent people,” he said.

Contact Katelyn Polantz at kpolantz@alm.com.