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Jordan Grushkin is a partner in the Corporate Practice Group in the firm’s Century City office and is a member of the firm’s healthcare practice team.

In its December Hospital Flash Report, Kaufman Hall identified and reviewed the continued, negative impact of COVID-19 on hospital operating margins. After a dramatic drop in hospital margins during the height of the pandemic in 2020 and early 2021, hospitals experienced a fluctuation of decreasing and increasing margins in the latter-half of the year. Overall, hospital margins remain significantly narrower than they were in 2019, before the pandemic. As a result, the industry may see an increase in hospital transactions in 2022 to offset the operational and financial hardships that continue to burden the health care system, as described in greater detail below.
Continue Reading COVID-19 Impacts and Outcomes on Hospital Margins in 2021: Increased Activity in Hospital Transactions in 2022?

On March 10, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (the “Act”). This $1.9 trillion COVID-19 relief package not only includes a whole host
Continue Reading The American Rescue Plan Act of 2021: A New Lease on Life for the Affordable Care Act?

Executive Orders and the Biden Administration’s promises to postpone or withdraw certain last-minute, so-called “midnight rules” promulgated by the Trump Administration are currently grabbing everyone’s attention, especially those in the healthcare space.  But while President Biden may have success in reversing much of his predecessor’s last minute regulatory activity, he is likely to face at least some headwinds as it relates to one of those midnight rules – the “Department of Health and Human Services Transparency and Fairness in Civil Administrative Enforcement Actions” (the “Final Rule”) – that was published in the Federal Register on January 14, 2021 and became effective on January 12, 2021.
Continue Reading Secret Rules and Hidden Penalties: Biden Executive Order Takes Aim at the Trump Administration’s Efforts to Limit HHS’s Use of Guidance Documents in Civil Enforcement Actions

On November 10, 2020, the U.S. Supreme Court heard oral arguments for California v. Texas, a case that will potentially decide the fate of the Patient Protection and Affordable Care Act (“ACA”).
Continue Reading Texas v. California: SCOTUS Hears Oral Arguments About the Constitutionality of the ACA

The death of Supreme Court Justice Ruth Bader Ginsburg, and alongside it the high probability of a conservative successor to the open seat she left behind, is likely to shift the Court substantially to the right. Among the most notable cases that will likely be presented before the newly constituted Court is the pending challenge to the Affordable Care Act (the “ACA”).
Continue Reading The Death of RBG…and the ACA?

On May 18, 2020, California  Senate Bill 977 (“SB-977”) was passed out of the California Senate Health Committee and is now scheduled for its first hearing before the Senate Appropriations Committee on June 1, 2020.   SB-977 as written would subject all acquisitions and affiliations on and after January 1, 2021 by larger health systems, private equity funds and hedge funds of (i) hospitals, (ii) other health facilities, (iii) physicians, (iv) clinics, (v) ambulatory surgery centers or  (vi) laboratories to prior approval by the California Attorney General.  In its current form, SB-977 would require the California Attorney General to withhold his approval from a proposed transaction unless the transaction would (i) increase clinical integration and/or (ii) increase access or availability of healthcare services to underserved populations, and would not otherwise be anti-competitive.  SB-977 would also give the Attorney General the discretion to hold a public hearing on a proposed transaction.  In short, with SB-977, the California Legislature is going far beyond earlier proposals or legislation in other states – including Connecticut and Washington State – that have prior approval requirements for healthcare transactions.

In this article, we consider the forces behind SB-977 – a decade or more of healthcare consolidations and the financial distress being experienced by hospitals and other healthcare providers as a result of the current healthcare emergency – and the potential impact that SB-977 could have on the California healthcare marketplace if it were signed into law in its current form.
Continue Reading Getting Ahead of California’s Post-Pandemic M&A Surge: California Senate Bill 977 Seeks to Expand Attorney General Oversight of Healthcare Acquisitions and Affiliations involving Hospitals, Health Systems, Private Equity Groups, and Hedge Funds

In 2012, the U.S. Supreme Court in NFIB v. Sebelius struck down a provision in the Patient Protection and Affordable Care Act (the “ACA”) which, for all intents and purposes, made the expansion of the Medicaid program voluntary for individual states.  As a consequence, the Medicaid expansion provided for in the ACA has been rolled out in piecemeal fashion, with various states opting to expand Medicaid in the years since the ACA’s passage, and other so-called “holdout” states choosing to preserve their respective pre-ACA structured Medicaid programs.  These holdout states tend to be more conservative and Republican-controlled, with governors and state legislatures opposed to the ACA’s Medicaid expansion for various political and economic reasons.  The COVID-19 pandemic, however, seems to have prompted some of these “holdout” states, even considerably conservative states, to reconsider their decision not to expand Medicaid.
Continue Reading Will COVID-19 Prompt “Holdout States” to Reconsider Medicaid Expansion?

On April 16, 2020, the Trump Administration issued its “Opening Up America Again Guidelines” (the “OUAA Guidelines”) as a self-styled roadmap to the staged reopening of the American economy.

On Sunday, April 19, 2020, the Centers for Medicare & Medicaid Services (“CMS”) followed suit by issuing new guidance (the “Reopening Guidance”) designed to reintroduce the provision of non-essential surgeries and medical procedures by healthcare providers located in “Phase 1” states and/or regions.  Such non-elective procedures were previously put on hold at the state and local levels in accordance with prior CMS guidance dated March 18, 2020 (the “March Guidance”) in which CMS called for the delay of all elective surgeries, non-essential medical, surgical, and dental procedures during the COVID-19 state of emergency.
Continue Reading Elective and Non-Essential Medical Procedures: States React to Federal Recommendations and the Opening Up America Again Guidelines

On March 17, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued a memorandum to provide information to organizations that participate in the Programs of All-Inclusive Care for the Elderly (“PACE”) program in furtherance of preventing the spread of the 2019 Novel Coronavirus (“COVID-19”).
Continue Reading CMS Issues COVID-19 Prevention Guidance for PACE Organizations

January 30th, 2020 marked a dramatic change in Medicaid funding, as the Trump Administration and Centers for Medicare & Medicaid Services (“CMS”) showcased a plan, called the “Healthy Adult Opportunity,” that would permit states to cap Medicaid spending. This was a blow to the Medicaid expansion under the Affordable Care Act (“ACA”), which expanded federal spending for low income individuals that did not previously qualify for the program.
Continue Reading ACA Medicaid Expansion Weakens: Trump Administration Unveils Optional Plan for Block Grants