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After a long respite in the shadow of their high-tech partners, some Washington, D.C.-area health care lawyers are following their clients into the Internet arena — and picking up new ones along the way — resulting in a mini-boom in regulatory counseling and corporate work. D.C.’s Arent Fox Kintner Plotkin & Kahn recently formalized a previously ad hoc grouping of e-commerce and health care lawyers in what the firm has dubbed an e-health practice, while D.C.’s Akin, Gump, Strauss, Hauer & Feld has acquired 17 health care corporate specialists from D.C. boutique Green, Stewart, Faber & Anderson. Besides Akin, Gump and Arent Fox, the D.C. offices of Chicago’s McDermott, Will & Emery, Los Angeles-based Latham & Watkins, and Milwaukee’s Foley & Lardner are beefing up their health care practices in hopes of an increase in e-commerce-related work. Of course, health care lawyers aren’t exactly the hottest commodity on the market, but they’re not as unpopular as they were in the mid-1990s, after a Hillary Clinton-led initiative to revamp the health care industry flopped. At the time, area firms, in anticipation of an explosion in demand for regulatory health care services, invested heavily in building up health care groups. “When the Clinton administration came into power, firms started gearing up in health care, in expectation of great things taking place, but that never happened,” explains Flo Frey, a headhunter at Frey & Sher Associates, who says she didn’t place one health care lawyer in 1993. This year, she expects to move more than 10, and is working on a few deals for practice groups. Marilou King, head of the 16-lawyer health care practice at McDermott, Will’s D.C. office, says that her group is taking on start-ups in health e-commerce, including a company that plans to broker insurance to online consumers. King is also advising established companies such as hospitals and physician practice groups — but particularly pharmaceutical companies — that want to conduct business on the Web. William Sarraille, a partner in Arent Fox’s 33-lawyer health care group, says his clients, both dot-coms and traditional providers, are responding to the Baby Boomer generation’s interest in having easier access to medical information and services. At the same time, he says, “In an age of declining medical reimbursements, the ability [of providers] to expand the number of consumers is absolutely critical.” Stuart Kurlander, head of the health care group in the D.C. office of Latham & Watkins, says that provisions in the Balanced Budget Act of 1997, which codified a new payment system for Medicare and other government-run health care programs based on the principle of “reasonable cost” had two adverse effects on the demand for regulatory health care services. First, the legislation set limits on the costs of medical services, squeezing health care providers’ profit margins and their ability to pay for expenditures like legal services. Second, by creating more clear-cut rules for Medicare reimbursement, the new laws restricted the discretion of government agencies in deciding how medical services were to be paid, which in turn reduced the number of legal squabbles over reimbursement issues. The end result: less work for health care lawyers. Or so it might seem. At about the same time the government passed the Medicare reforms, it also stepped up significantly its efforts to audit, investigate, and prosecute health care providers — a change that has led many health care regulatory attorneys to become health care compliance or fraud and abuse attorneys. Besides, says Kurlander, “Any time there’s a change in the payment system, businesses are required to restructure, and that requires contracts. So you see regulatory lawyers becoming corporate lawyers.” Traditionally, the problem with most D.C. health care practices is that they tended to be heavy on regulatory and light on corporate lawyers. Akin, Gump chairman R. Bruce McLean says that since 1998, spurred by growing health care client demands for corporate services, he has sought to add transactions lawyers to the firm’s 23-lawyer health care practice. That’s not to say that the rush of health care providers going online hasn’t spawned enough regulatory health care issues work. “No real regulation exists in this area,” says Latham’s Kurlander. For a lawyer, that kind of uncertainty and the work that accompanies it is just the tonic.

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