Timothy McHale, Associate in the Health Care & Life Sciences practice, in the firm’s Newark, office, was quoted in Modern Healthcare, in “How Hospital Merger Oversight Is Shifting Deal-Making,” by Alex Kacik. (Read the full version – subscription required.)
Following is an excerpt:
Health systems are increasingly pursuing mergers and acquisitions in the South, a region where demand for care is growing and there are fewer regulatory barriers.
More than a dozen states have passed laws over the past several years designed to increase oversight of healthcare transactions, but Southern states have largely stayed on the sidelines. As a result, deals involving hospitals are expected to pick up in the South, particularly in markets that feature growing populations, a high number of Medicaid patients and less stringent merger reviews, merger and acquisition advisers said.
Potential Medicaid cuts could also drive up deal-making in the 16-state region spanning from West Virginia to Texas, as well as Washington, D.C., advisers said. Hospital finances are expected to decline if Republicans follow through with proposals to eliminate enhanced federal payments for states that expanded Medicaid coverage and cap Medicaid funding, among other proposals. ...
But deals are more expensive when health systems face regulatory hurdles, which may prompt them to look at states with more favorable regulatory environments.
The resources and time spent on merger proposals are much more streamlined in states that don’t have those laws, said Timothy McHale, a healthcare lawyer at law firm Epstein Becker Green. You may not have to hire regulatory counsel, and as far as timing, you don’t have the big elephant in the room on whether a deal will get through or not and how long it will take to close. ...
