Wednesday, July 10, 2013, 1:13 PM

Want a Law Job? Learn the Health-Care Act

Check out this recent article from the Wall Street Journal ...

Want a Law Job? Learn the Health-Care Act


By JENNIFER SMITH


Some companies are warning that President Barack Obama's health-care overhaul will cost jobs. It won't be in their legal departments.

Health-care companies racing to comply with the Affordable Care Act and other rules are calling in the lawyers, sparking a mini-boom for specialist attorneys who can backstop overloaded internal teams and steer clients through an increasingly crowded regulatory minefield.

Seizing opportunity at a time when overall demand for legal services remains soft, some law firms are beefing up their health-care groups. New hires include lawyers who specialize in complex hospital mergers, for instance, or who can advise private-equity firms on potential investments in new medical technology. Other firms have carved out highly specific niches such as appealing Medicare audits or handling reimbursement disputes.

Lawyer Carolyn Metnick doesn't see demand letting up soon.

Even companies with robust in-house law departments are increasingly calling on outside lawyers who specialize in the most arcane corners of health-care law.

"You need to go to outside experts more and more because the pace of change is accelerating," said Robert Gilman, general counsel for AmeriHealth Caritas, a managed-care company that focuses on Medicaid members and other low-income populations. "There are a lot of questions that nobody knows the answers to yet."

Businesses across a wide swath of the economy will be affected by the new health-care law, particularly the employer mandate that kicks in next year, under which companies must either provide health coverage for workers who clock 30 or more hours a week, or pay a penalty.

Health-care reform was rated an "important" issue for 45% of more than 1,100 chief legal officers surveyed last year by the Association of Corporate Counsel, a trade association for in-house lawyers. Their concerns are growing as compliance deadlines loom—50% said health-care reform would be important in 2013.

For hospitals, insurance providers and other health-care companies, the employer coverage mandate is just one item on a lengthening regulatory to-do list. A host of industry-specific provisions in the Affordable Care Act will change the way they do business, even as many are spending significant time and money to comply with a groundswell of earlier rules.

Meanwhile, regulators on the lookout for health-care fraud and other infractions have stepped up enforcement. Last year state and federal governments netted $7.2 billion in settlements from the health-care industry, according to a report by law firm Gibson, Dunn & Crutcher LLP.

It all adds up to big business for lawyers. Last year corporate clients spent $5.72 billion on legal advice for regulatory matters, including health care, and the market is projected to grow to $6 billion this year, according to a recent survey of corporate legal spending by BTI Consulting Group Inc.

Despite the demand, health-care lawyers don't typically command gold-plated rates. Some major law firms do have substantial health-care practices aimed at capturing lucrative work on key antitrust cases or major transactions. But cost-conscious clients often direct much of their legal work to more affordable lawyers from regional firms with lower overhead.

That is good news for attorneys such as Les Johnson, a partner at Liles Parker PLLC, a 17-lawyer boutique based in Washington, D.C. A self-described "regulations dork," Mr. Johnson works out of the firm's Baton Rouge, La., office. He started out representing small clinics and nursing homes, then developed a specialty in Medicare appeals that earned him a national client base.

"The more they tinker with the federal regulations, the more work we have," said Mr. Johnson.

Among the legal complications: an existing law intended to reduce conflicts of interest during patient service referrals for services such as X-rays has made it trickier for hospitals to structure contracts or acquire doctor groups even as industry consolidation accelerates. A new rule mandating disclosure of financial ties between health-care providers and companies that make drugs and medical devices will increase reporting requirements.

Health-care companies are also dealing with changes this year by the Department of Health and Human Services which strengthened existing patient privacy rules and changed the way providers are required to respond to data security breaches. Next up: an overhaul of the code that governs how medical diagnoses and inpatient procedures are reported.

Keeping up with all the changes is like "drinking from a fire hose," said Gavin Galimi, general counsel for March Vision Care Inc., a Los Angeles company that manages vision benefits nationally for insurers that contract with Medicaid, Medicare and various state insurance exchanges being set up under the Affordable Care Act. "Every company is worrying about what they forgot or don't know."

The chief legal officer for one company that manufactures medical equipment said his legal team spent a considerable amount of time analyzing how various provisions of the Affordable Care Act—such as a medical device tax—would affect the business, and what steps were needed to comply with the law. Resolving those questions means longer hours for his in-house legal team—and spending more money on outside lawyers and other advisers.

"No company wants to get it wrong, because the cost of a bad judgment call is significant on this," he said.

Compliance isn't the only concern. Some pieces of the Affordable Care Act will also shift how hospitals and insurers do business—generating more work for attorneys needed to structure deals and contracts.

For example, new health-care delivery models intended to cut costs and improve patient outcomes are being tested that could supplant the fee-for-service approach most providers now use.

"The organizational structures and the way health care is being organized and paid for is changing at a really rapid rate," said William S. Bernstein, chair of the health-care division at law firm Manatt, Phelps & Phillips, LLP.

At the same time, a wave of consolidation among hospitals and medical practices that predated the health-care reform is accelerating, driven in part by providers' quest for economies of scale, said Stephen W. Bernstein, a partner at McDermott Will & Emery LLP who heads the firm's health industry advisory practice group. Insurance providers and health plans are also teaming up with hospitals and medical groups to try and reduce costs, he said.

Those mergers are drawing more attention from antitrust regulators concerned about reduced competition and potential price increases. The Federal Trade Commission and state attorneys general have challenged such transactions in Georgia, Idaho and elsewhere.

"There is so much regulatory scrutiny," said Carolyn Metnick, a lawyer at Barnes & Thornburg LLP in Chicago. She began her career as a litigator but switched tracks six years ago and now specializes in health-care transactions. "I don't see demand letting up anytime soon," she said.

A version of this article appeared June 17, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Wanted: Health-Care Legal Experts.

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1 Comments:

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September 7, 2013 at 1:39 PM  

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