In the wake of the initial months of the COVID-19 pandemic, many practitioners have started to see a notable uptick in healthcare M&A activity through the third quarter of 2020. Such activity spans from consolidation transactions in certain medical practice segments, accretive acquisitions in the hospice and home health space, business combinations to expand telemedicine offerings, and a growing interest in value-add healthcare real estate opportunities. In most cases, the seller parties that have weathered the COVID-19 storm have done in so in part through the lifelines of funding provided by the U.S. Small Business Administration (SBA) through the CARES Act, and in particular Paycheck Protection Program (PPP) loans. However, as the healthcare M&A deals initially inked in Q3-2020 now shift to closing mode in Q4-2020, these PPP loans are presenting new challenges for both sellers and buyers. The following highlights some of the key issues.
In order to clarify the required procedures for changes of ownership of entities that have received Paycheck Protection Program (“PPP”) funds, the Small Business Administration (“SBA”), on October 2, 2020, released a Procedural Notice. Specifically, the Procedural Notice addresses the procedures companies with outstanding PPP loans must follow when undergoing a change of ownership, including mergers, equity or asset acquisitions, or ownership restructurings.
Prior to the October 2, 2020 Procedural Notice, SBA loans typically required prior SBA approval for any transaction involving a change of ownership, regardless of the percentage change. Without further guidance from the SBA, PPP lenders have been cautious in granting their consent to their PPP borrowers’ change of ownership transactions without prior SBA approval in order to avoid potential defaults and forego forgiveness rights of the PPP loan.
There’s no such thing as a free lunch…. This adage is over 50 years old, and the Office of Inspector General for Health & Human Services (OIG) wants to remind doctors that it remains true.
The pharmaceutical and medical device industry continues to woo doctors with invitations to educational speaker programs in high-end restaurants, with golf excursions, or at sporting venues. On Monday, November 16, the OIG issued a new Special Fraud Alert to remind doctors that speaker programs sponsored by pharmaceutical and medical device companies must serve a legitimate educational purpose and must be appropriately tailored to meet a need in the medical community.
The Open Payments Act requires pharmaceutical and medical device companies to report their spending on entertainment. According to Open Payments data, cumulative doctor payments in the three years from 2017-2019 exceeded $2 billion, and the OIG emphasized that this high amount of spending, and its potential to influence the prescribing or ordering habits of targeted physicians, was one of the reasons for this new alert.
It’s no secret that the Department of Justice has made the False Claims Act (“FCA”) a priority for years. Last month, we discussed why regulatory changes in response to Covid-19 (e.g., STARK waivers) could provide additional bases for the government to bring FCA cases. This post addresses the basics of cooperation credit for defendants who cooperate with the Department of Justice during an FCA investigation.
On October 23, Shareholder Corinne Smith will moderate a coding webinar titled, “Changes to Outpatient Evaluation and Management (E/M) Guidelines,” which will cover the significant changes to outpatient E/M services that will go into effect on January 1, 2021. The webinar will also discuss best practices and elaborate on information that is critical for healthcare attorneys, accountants and medical professionals to understand as they navigate healthcare compliance issues, false claims and reimbursements.
This webinar is approved for CPE and CLE credits.
Corinne Smith, Shareholder, Winstead
Jeannie Cagle, Senior Manager, Coker Group
Rosalind Cordini, Senior Vice President/Director of Coding & Compliance Services, Coker Group)
Register here: https://bit.ly/3lUuRfZ
Tuesday, October 20, 2020 | 12:00 p.m. to 1:00 p.m. (EDT)
Winstead attorneys Frank Amini, Ph.D. and Lekha Gopalakrishnan, Ph.D. will present at an AUTM live webinar on the topic of protecting trade secrets on Tuesday, October 20, 2020. Trade secrets can be an institution’s most valuable and prolonged assets.
However, maintaining trade secrets in academic institutions can be challenging because trade secret protection requires secrecy, while academic institutions generally advocate publication and open collaboration. Furthermore, determining whether trade secret protection is appropriate in academic institutions can be complex. This session will shed light on these challenges by covering the basics of trade secrets, guidelines for choosing between patents, copyrights, trademarks and trade secrets to protect inventions derived from academic institutions, and steps that academic institutions must take to protect trade secrets. LEARN MORE.
$150 AUTM members / $225 Non-members
Frank and Lekha will provide insights on the following:
- Determine whether or not trade secret protection is appropriate in academic institutions
- Discuss the basics of trade secrets and guidelines for choosing between patents, copyrights, trademarks, and trade secrets
- Describe steps academic institutions must take to protect trade secrets
As landlords and tenants continue to navigate the uncertainties of traditional office and retail properties in the era of COVID, one asset type that has emerged as more resilient in this new environment is life science real estate. The spaces utilized by biotech and pharmaceutical companies, as well as medical research facilities, are highly technical, with site-specific functionality that cannot be replicated by remote work environments. As a result, life science real estate continues to attract tenants and property owners continue to invest in this sector. However, utilization of space for life science uses—wet and dry laboratories, warm rooms and cold rooms, and other activities—presents a number of specific issues for both tenants and landlords that should be considered in any lease transaction. Below is a summary of some of those issues from both a tenant’s and a landlord’s perspective.
How do you take a negative and turn it into a positive? COVID-19 has made answering this question very difficult, as the pandemic continues to have a negative and in some cases long lasting and devastating impact on people’s daily lives and the many businesses that help sustain daily living. One area of business that has been hit particularly hard, as a result of the pandemic, has been the hospitality industry. According to a new national report completed by Trepp , the hotel industry is facing an unprecedented number of foreclosures as the COVID-19 pandemic continues to devastate small business hotel owners and its workforce. More specifically, American Hotel & Lodging Association (AHLA) conducted a survey of more than 600 hotel owner respondents and more than half of them stated that they are in danger of losing their property to foreclosure by commercial real estate lenders due to COVID-19. As a result of these market conditions, some senior living developers and operators see a growing opportunity to capitalize on the hotel foreclosures by converting them to assisted living facilities. However, turning this negative into a positive won’t go without its challenges, and developers and owners should be mindful of some pitfalls when attempting to make this conversion a reality in Texas.
This article examines the different types of preferential rights in ground leases for medical office buildings, and examines strategies in drafting preferential rights provisions to protect the interests of both ground lessors and ground lessees. Ground leases are a popular way for hospitals and health systems (collectively, “Hospitals“) to maintain ownership and control of their hospital campus, while also allowing them expand their campuses or monetize equity tied up in Hospital-owned buildings. Typically, a ground lessee (or, the “MOB Owner“) is either a developer of, or investor in, medical office buildings (“MOBs“) who either develops the MOB or acquires an existing MOB from the Hospital and then subleases space within the MOB to physicians, physician groups or the Hospital itself. Under a ground lease, typically the MOB Owner holds a leasehold interest in the real property and owns fee title to the building and other improvements located thereon for the term of the ground lease, and upon the expiration of the ground lease, title to the improvements reverts to the Hospital.
The U.S. Department of Health and Human Services (HHS) recently finalized transformative rules that will give patients unprecedented safe, secure access to their health data. The rules are issued by the HHS Office of the National Coordinator for Health Information Technology (ONC) and Centers for Medicare & Medicaid Services (CMS) to implement interoperability and patient access provisions of the bipartisan 21st Century Cures Act (Cures Act). These final rules mark the most extensive healthcare data sharing policies the federal government has implemented, requiring both public and private entities to share health information between patients and other parties while keeping that information private and secure. These final rules became effective as of June 30, 2020. NOTE: Due to the COVID-19 public health emergency, HHS has delayed enforcement until future dates. Continue Reading How HHS Information Blocking Regulations Apply to Healthcare Providers