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It has been widely reported that healthcare mergers and acquisitions are off to a strong start this year after ending a record-breaking year in 2017. In fact, the healthcare press this year has been replete with articles extolling the “good news” about healthcare investment and transaction activity. For example:

  1. As reported by Kaufman Hall, the number of “hospital and health system transactions announced in 2017 totaled 115, up 13% over 2016 and the highest number recorded in recent history.” Kaufman Hall, “2017 in Review: The Year M&A Shook the Healthcare Landscape,” January 29, 2018;
  2. According to data from Bloomberg, the total deal value of healthcare transactions announced in the first quarter of 2018 is approximately $156 billion. “Health-Care M&A Balloons in Busiest Start in More than a Decade,” by Manuel Baigorri (March 28, 2018) (https://www.bloomberg.com/news/articles/2018-03-28/health-care-m-a-booming-in-busiest-start-in-more-than-a-decade). Not surprisingly, Bloomberg’s transaction value data also shows that first quarter 2018 is the busiest first quarter in more than ten years; and
  3. As reported last month by Forbes in, “Why Private Equity Loves Retail Healthcare from 2012 to 2017,” Nirad Jain, Kara Murphy and Jeremy Martin, April 4, 2018, https://www.forbes.com/sites/baininsights/2018/04/04/why-private-equity-loves-retail-healthcare/#4883ce071924, “From 2012 to 2017, the number of deals involving retail health companies—those that operate freestanding health-related outlets like dental clinics or urgent care facilities—has soared, increasing at a compound annual rate of 34% in the North American market.” Citing, the Bain & Company’s Global Private Equity Report 2018 (http://go.bain.com/global-private-equity-report-2018.html), the authors write that the growth in retail healthcare transactions is, in some significant part, a function of the fact that, “retail health is a fragmented, high-margin sector with strong growth characteristics. In a sea of high prices, it still offers targets at reasonable multiples and many opportunities to unlock substantial value.”


Continue Reading The Shape of Healthcare: Blockbuster Mergers, Retail Healthcare, and Marcus Welby, M.D

In 2010, the Affordable Care Act (“ACA”) enacted new rules governing overpayments made by the Medicare and Medicaid programs. Under these rules, providers have 60 days from the date that the overpayment has been identified to return the overpayment or face penalties and treble damages under the False Claims Act (“FCA”).  As described below, recent regulations have clarified some of the issues surrounding the ACA obligation to refund overpayments, at least for overpayments under Medicare Parts A and B.  But, determining whether a provider has “identified” an overpayment – and thus started the 60 day countdown – can still be nuanced and complex.  Diligent providers that have proactive and robust compliance and audit functions in place may find some comfort, since such providers are presumably able to respond quickly to credible information that there has been a potential overpayment, as required by the new regulations, and thereby have a reasonable period of time to conduct an investigation and quantify the amount of any overpayment before the 60 day clock begins to run.
Continue Reading The Overpayment Rule and the Implied False Claims Theory: “What You Don’t Know Can Still Hurt You”