Practice / Contracts
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
