State Legislation Impacting Health Care Transactions

Health care entities expanding or selling their businesses must navigate evolving state approval laws that could delay swift transactions.

Fueled by concerns about the potential adverse impact on competition, access to care, and quality of care resulting from consolidation in the health care delivery system, states are imposing prior approval or prior review legislation to allow for more visibility regarding the proposed transactions. Much of the legislation seeks to increase oversight of health care entity relationships with management companies and private equity firms. New legislation that requires advance notice or pre-approval of health care transactions, creates new corporate practice of medicine (CPOM) prohibitions, or compels corporate transparency is affecting the ability of private equity firms and management companies to operate and work with patient-facing health care organizations.

As a health care “super boutique” with an in-depth understanding of the industry and the laws that govern it, Epstein Becker Green deftly guides health care providers, private equity firms, management services organizations, and other health care entities through the intricacies of a rapidly changing legislative landscape so that they can grow or sell their companies while understanding and adapting to the regulatory landscape impacting such transactions. 

Our Services

Epstein Becker Green advises health care clients on the state and federal laws, as well as new and proposed legislation, that impact their expansion, investment, or divestiture initiatives or the relationships among health care organizations, investors, and management companies.

We address the full range of issues for health care and investor clients to consider when expanding into a new market, investing in a health care venture, or buying or selling a health care business, including the following:

• Health care transaction restrictions:
  • Deal timing and pipeline considerations
  • State notice requirements (where applicable)
  • State requirements for prior approval of “material” transactions (where applicable)
  • Certificate of need (CON) approvals
  • Physician and facility licensure requirements
  • Medicare and Medicaid certification requirements
• Managed practice considerations:
  • CPOM restrictions
  • Compliant corporate structuring and “friendly PCs”
  • Employment of professionals
  • Funds flow and fee splitting
  • Scope of practice issues
  • Supervision of professionals

• State noncompete laws impacting health care entities

For transactions subject to reporting requirements, we also develop a transaction strategy around such reporting, assess what information must be reported, identify mechanisms to protect the confidentiality of such reports, submit the reports on behalf of clients, and help obtain any necessary government approval of their transactions.