Contracts / Healthcare
Client: Community-based hospital
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
Legal issues:
- 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
Legal solutions/strategies:
- 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
Outcome:
Successful implementation of new IT infrastructure
Client: Hospital in medically-underserved community
Situation: Financially unstable hospital needed to finance acquisition of new diagnostic equipment
- Limited ability to raise capital through usual means (e.g. bonds)
- Received multiple New York City Council capital allocations, which remained unfunded
Legal issues:
- 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
Legal solution/strategy:
- 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
Outcomes:
- Client deployed sophisticated medical equipment to help its inner-city patients
Client: Physician/Hospital Clinical Department Chair
Situation: Physician needed to negotiate exit agreement
- Physician had been a leader of clinical department for 16 years
- Health system was closing facility as part of restructuring
Legal Issues:
- 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
Legal Solution/Strategy:
- Negotiated with hospital to revise settlement documents
Outcome:
- Financial settlement increased from initial offer
- Payment terms were revised to meet client’s financial and tax needs
- Health insurance terms structured to meet needs of client’s family
Client: Financially-challenged hospital
Situation: Hospital facing unanticipated $15 million exposure
- 10-year-old GL claim being defended by hospital’s former GL carrier
- Transition in hospital’s risk management department resulted in loss of institutional memory and records regarding claim
- Client unaware that hospital excess carrier disclaimed coverage
- Client unaware that insurance counsel lost trial as to liability
- Insurance counsel contacted hospital for at end of damages trial — and on the day before a holiday weekend — to obtain client funds for settlement
- Based upon available information, client refused to provide funds; attorney lost damages trial, resulting in $15M exposure
Legal issues:
- Need to reassert active oversight of matter through engagement of experienced trial and insurance coverage counsel
- Need to persuade excess coverage carrier of their inability to disclaim coverage in order to reduce client exposure
Legal solution/strategy:
- Reconstruct claim history
- Engage new counsel and develop legal strategy
- Address excess carrier’s untenable position and convince all of client’s inability to contribute to settlement
Outcome:
- Excess carrier was brought to table and assumed liability
- Case was settled with no out of pocket expense for client
Client: IT Company in Mobile Patient Communication Space
Situation: Client developing new business technologies in healthcare
- Technology application was new
- Regulatory guidance was unclear
- Previous counsel advised client to abandon business plan
Legal Issues:
- 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
Legal Solution:
- 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
Outcome:
- 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
