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VOL. 37 | NO. 25 | Friday, June 21, 2013

Lawyers see growing demand in health care specialty

By Jeannie Naujeck

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Stuck in a stagnant legal career, or just starting out with no job openings in sight? The antidote may be a switch to health care law.

Attorneys with experience in health care have a good career prognosis in Nashville, thanks to federal reform efforts that are generating volumes of legal work in a wide range of activities involving health care companies.

The Patient Protection and Affordable Care Act, passed in 2010 and largely upheld by the Supreme Court last year, has created a host of new regulatory and compliance issues for health care providers.

Billing for services under Medicare and Medicaid is under greater scrutiny. The switch to electronic medical records is raising privacy concerns. And downward pressure from all sides on medical service reimbursements is forcing many providers to merge, enter partnerships or even go bankrupt.

“That’s what is driving the growth in health care practices,” says Phil McSween, who chairs the health law group at Baker Donelson Bearman Caldwell & Berkowitz, the nation’s 10th-largest health care law firm measured by number of attorneys who are members of the American Health Care Lawyers Association. He counts about 120 lawyers engaged in the health care practice.

“Health care has always been a dynamic field, but reform has accelerated that.”

His firm has nearly doubled the size of its health care group in the past five years or so, and has made significant additions to its health care practice this year. About 20 percent of firm revenues are derived from health care companies, he said.

Waller Law, Nashville’s largest law firm, is ranked third by the AHCLA.

This spring, it hired four new lawyers in its health care practice. Last June, Waller expanded in Austin, Texas, to serve the large health care market there and, shortly after, won a contract to help the Texas Health Services Authority develop a platform for the sharing of electronic medical records statewide.

Waller attorneys from Austin and Nashville will help negotiate vendor agreements and provide counsel on privacy and security compliance.

Waller has also recently helped a health care provider negotiate a complex Chapter 11 bankruptcy and is assisting Brentwood-based LifePoint Hospitals in building a large regional hospital network in a joint venture with Duke University Health System.

“Health care is our signature and the focus of our firm,” says chairman John Tishler. “Health care covers all areas.”

The practice area does cover a lot of ground, making the legal and business side of health care as intellectually rich and challenging as practicing medicine. Health care lawyers may deal with mergers and acquisitions, compliance, medical defense, labor and employment, pharmaceutical litigation, privacy, bankruptcy or intellectual property.

Adding a new layer of complexity are the host of new regulations contained within the PPACA that are designed to move the nation’s health system toward covering all residents with government-sponsored insurance (Medicare for Americans 65 and older and Medicaid for the poor) or private insurance (from carriers such as Aetna, Cigna and Blue Cross and Blue Shield), emphasizing access to primary care and disease management so medical issues can be diagnosed and treated early, and changing the way providers are paid to incentivize better care over more care.

Hospitals and physicians, traditionally reimbursed by private and government payers for medical services based on a fee-for-service model (i.e., a set fee for a doctor’s appointment, a surgical procedure or other medical service), will now be paid based on quality outcomes – how healthy they can keep patients.

They are being required to form accountable care organizations through which they work together to coordinate patient care by sharing data through the use of electronic medical records (EMR).

Across the country, physicians are dismantling their practices and becoming direct employees of hospitals to avoid the large capital expenditures required to buy and implement EMR technology to share patient data with hospitals.

The downward pricing pressure combined with increased expectations is generating mergers and acquisitions among health care providers, as well as bankruptcies for those who have defaulted on loans.

“Typically you don’t have bankruptcy attorneys that specialize in health care, but they’re getting more and more involved now by having to learn that specialty,” says Scott Mertie, president of Kraft Healthcare Consulting in Nashville, who is not an attorney but is one of six members of the American Health Care Lawyers Association task force on health care reform.

A great deal of legal activity is also being generated in compliance, as health care claims come under greater scrutiny by Medicare, Medicaid or other payers reviewing whether a claim should have been paid, Mertie says.

Many states are expanding Medicaid by opening eligibility to more residents. Services for Medicaid patients are typically covered at a much lower rate than services covered by commercial insurance carriers in employee health benefit packages.

State and federal agencies will be going over claims with a fine-toothed comb for any sign of fraud or abuse – making more medical claims subject to audit.

“That work has definitely bumped up this past year and I expect it to continue in years to come. Compliance, coding and documentation … that area is just booming,” Mertie says.

Kraft’s coding and documentation practice area has grown from one full-time employee to four in two years, Mertie says. Half the work is from providers seeking to stay in compliance. The other half is from attorneys called in to defend billing issues.

For providers found to be out of compliance, the ramifications are serious.

“If the bill was done improperly… they may not only not be paid, but may be subject to criminal liability, may be excluded from Medicare programs or have future Medicare payments just shut off,” McSween says. “It’s a tough environment.”

More than 250 health care-related companies, 15 of them publicly traded, are based in Nashville, according to the Nashville Health Care Council. But even hospital and health care companies based in much bigger markets look to Nashville for legal advice.

“Health care companies around the country will hire Nashville lawyers because if you’re a Nashville health care lawyer you’re kind of credentialed,” McSween says.

“And Nashville firms are generally seen as a value compared to the Washington, Chicago, Boston firms that we usually are across the table from.”

That means Nashville is not only a capital for health care, but a capital for health care law. And unless the nation moves to nationalized health care, there’s little chance the work will go away.

“There’s no movement to deregulate healthcare,” McSween says. “It’s becoming a bigger piece of the GNP and what the government spends its money on. We’ll have to spend less, and there will be harder fights for the dollars in health care.”

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