Contracts / Information Technology

Situation: Client separating from larger health care system

Three hospital health care system disaffiliating
Client was smallest of three entities, disproportionately reliant on parent organization
Constituent organizations built and maintained joint data center and technology platform, which needed to be divided to enable disaffiliation
Parent organization insisted upon payment of outstanding inter-company indebtedness
All negotiations made more complex because some negotiations were among former health system entities, and some were between the former health system and its chosen outsource vendor

Former parent effectively threatens ongoing viability of client’s IT infrastructure and potentially its ability to provide patient care
Client need to negotiate division of assets and phase out of existing IT infrastructure and support from former parent organization
Need to negotiate with vendor to outsource data center operations
Negotiations were made more complex because some negotiations were adversarial among the disaffiliating partners
Client needed to independently replace hardware and software platform, including
license clinical, financial, radiology, laboratory and departmental systems
Need to negotiate with parent transitional arrangements pending cut over to negotiated systems pending go-live of its new IT infrastructure
System transition could not impair patient care or ability of client to bill and collect for its services

Collaborate with health system team on negotiation of replacement outsourced data center meeting all IT needs
Negotiate with outsource vendor for specific client needs
Negotiate with software providers for clinical and financial IT licenses on an urgent basis to implement new platform
Negotiate with former parent organization for temporary continuance of access to former data and support platform during transition to new platform

Successful implementation of new IT infrastructure

Limited ability to raise capital through usual means (e.g. bonds)
Received multiple New York City Council capital allocations, which remained unfunded

Inefficient City processes delayed urgently-needed capital funding for years
Regulators required client to own and possess equipment prior to drawing funding
Interim unsecured equipment financing required
Acquisition and equipment maintenance agreements required

Anticipate City needs and rigidly organize all submissions to proactively address NYC concerns
Negotiate equipment acquisition, financing and support agreements with vendor
Ensure that vendor needs were met by initially securing the loans and client needs met by an early release of lien in order to satisfy City

Hospital administration initially advised client that an alternate position would be available
After a significant delay, administration informed client that no such position existed
Proposed severance terms were not acceptable

Client’s proposed business model involved providers sending text messages to patients
Federal and state regulations — including HIPAA — affected viability of client’s business model
Legal structures needed to permit further development and deployment of business model within context of rapidly-developing regulatory scheme

Research myriad federal regulations, including HIPAA and TCPA
Research state regulations regarding health care information, information security and electronic signatures
Develop legal analysis supporting client’s business model
Create with client unique consenting and workflow processes enabling client’s business model

Client launched real time patient engagement platform with robust back-end analytic tools
Client company was acquired by larger entity approximately 4 years after launch