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Health Systems/Hospital Transactions

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Baker Donelson's Health Law Department has experience with health system and hospital transactions that few law firms can match, with more than 200 sales and acquisitions completed in 15 different states.

Featured Experience

Represented a non-profit hospital in establishing coverage and hospitalist professional services arrangements with various specialties, including cardiovascular surgery, cardiology, pulmonology/intensivist, neurology and telemedicine services, and structuring fair market value compensation.

Advised on various hospital transactions, including conducting regulatory due diligence, drafting documents, facilitating licensure and certification transfers and addressing compliance issues.

Represented an independent community hospital in acquiring numerous primary care and specialist physician practices, applying a Professional Services Agreement (PSA) model approach, resulting in provider-based physician clinic status. Structured fair market value wRVU-based compensation models, including physicians in medical oncology, cardiology, nephrology, orthopedic surgery and gynecology.

Practice Overview

Overview

Buying or selling a hospital is unlike any other type of business transaction, with an unparalleled amount of regulatory oversight and legal complexity. There are Medicare and Medicaid ramifications, multiple licenses (hospital, lab, pharmacy, etc.), provider numbers, payor and physician contracts to review, unique building and safety codes and hazardous equipment (e.g. nuclear medicine).  Frequently, there are antitrust implications, and the Federal Trade Commission must approve the transaction.  If the hospital is governmental or non-profit, the state attorney general might be involved.

This list does not include the many laws and regulations specific to health care, such as HIPAA, the Stark law on self-referrals and the federal Anti-Kickback Statute. There is likewise a risk of Medicare audits extending years into the future – and payments made years earlier that might be recaptured, if billing errors are identified.

Despite the complexity of the transaction, the hospital cannot miss a heartbeat. Business must go on as usual, 24 hours a day, 7 days a week, without a lapse in access, services, operations, or financing.

Baker Donelson's Health Law Department has experience with health system and hospital transactions that few law firms can match, with more than 200 sales and acquisitions completed in 15 different states. We have worked on transactions large and small, representing both for-profit and nonprofit hospitals, public and private, as buyers and sellers. We've handled transactions involving acute care hospitals, behavioral hospitals, rehabilitation hospitals and others. We’ve helped buyers secure bank financing, worked on private equity and venture capital deals, and handled joint ventures between and among physicians for profit and non-profit partners.

Our approach is unique – from the very beginning of each transaction, we focus not just on the deal itself but the client’s objectives.  Is price the prevailing consideration, or is it picking the right partner?  Are continuing covenants involved?  Are the covenants significant and extraordinary, or usual and customary? With the client's objectives in mind, Baker Donelson can focus on adding value, in quantifiable ways, and not merely on documenting the deal.

Hospital transactions involve both art and science. Baker Donelson attorneys serve as long-term counsel to hospitals and health systems: We know what an extraordinary change a sale represents to employees, physicians, patients and communities. Lives – and livelihoods – are at stakeWe also have the sensitivity required to work on delicate transactions, such as the sale of a community-based, publicly-owned hospital to a for-profit entity, where the stakes and emotions are high. The hospital is a vital community asset, a pillar of the community, perhaps the largest employer in town. Its sale affects virtually everyone. And the process is even more complicated, with independent valuations and Requests for Proposals and oversight by state and local officials. A communications plan is essential.  An experienced communicator is invaluable.

With intense pressure on the entire health care industry for cost efficiencies, the surge among hospitals and health systems to consolidate is expected to continue and even accelerate.  We excel in representing clients in complex situations and transactions.  We have been there before, and our experience is evident.

Representative Matters
  • Represented a non-profit hospital in establishing coverage and hospitalist professional services arrangements with various specialties, including cardiovascular surgery, cardiology, pulmonology/intensivist, neurology and telemedicine services, and structuring fair market value compensation.

  • Advised on various hospital transactions, including conducting regulatory due diligence, drafting documents, facilitating licensure and certification transfers and addressing compliance issues.

  • Represented an independent community hospital in acquiring numerous primary care and specialist physician practices, applying a Professional Services Agreement (PSA) model approach, resulting in provider-based physician clinic status. Structured fair market value wRVU-based compensation models, including physicians in medical oncology, cardiology, nephrology, orthopedic surgery and gynecology.

  • Counseled a multistate hospital company on the acquisition of an electronic medical records system.

  • Advised a health care-related business on contract disputes.

  • Representation of healthcare corporation in separation from its largest shareholder and subsequent corporate reorganization.

  • Represented a major hospital system in the termination of all contracts related to force majeure issues.

  • Counseled a specialty health care services company in selling assets to a leading provider of cardiovascular imaging services and solid-state nuclear medicine imaging products.

    (2012)
  • Represented cardiology, medical oncology and internal medicine practices in connection with the sale of medical practices to health care delivery systems.

  • Negotiated multi-provider acquisitions.

  • Represented State of Louisiana in the acquisition of Hotel Dieu for the Orleans University Medical Center (formerly Charity Hospital).

  • Served as lead and/or co-regulatory counsel in corporate transactions valued at up to $1 billion.

  • Represented one of the merger partners in the successful merger of two urology medical practices located in Georgia.

  • Represented an independent community hospital in negotiating a strategic affiliation agreement to join a clinically integrated network.

  • Assisted health care system in obtaining merger approvals (HSR) for several acquisitions throughout the southeastern U.S.

  • Represented a for-profit company in purchasing a 140-bed acute care hospital from a local governmental instrumentality.

  • Represented a non-profit hospital in the sale of a long term acute care (LTAC) hospital to a publicly traded for-profit hospital company, with a transaction value of $7 million.

  • Represented a regional non-profit health system in purchasing a 17-physician cardiovascular group.

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We use them because of their reputation and expertise. Their healthcare attorneys are big names in the industry, both locally and nationally.

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