0:14

Support for A HLA comes from PYA

0:16

for nearly 40 years, PYA has

0:19

helped clients find value in the complex

0:21

challenges related to mergers and acquisitions, clinical

0:24

integrations, regulatory compliance,

0:27

business valuations, and fair market value assessments

0:29

and tax and assurance. PYA

0:32

is recognized by Modern Healthcare as one

0:34

of the nation's top 20 healthcare consulting

0:36

firms, and by inside public

0:39

accounting as a top 100 accounting firm. Learn

0:41

[email protected].

0:45

Hey Gina, how are you today?

0:47

Hey, Anna. All good. This is

0:49

very exciting to be getting together in advance

0:51

of the conference. I know we are

0:54

, um, eager to reach

0:56

out to the potential attendees

0:58

in this short podcast and talk about , uh,

1:01

A-H-L-A-A bit in this conference. And

1:03

I understand this conference was the first a

1:05

HLA conference you attended Exactly 10 years

1:07

ago, Anna

1:08

Mm-Hmm. <affirmative> , that is correct. And it has,

1:11

I've so many fond memories of

1:13

this conference. It was actually my first

1:16

introduction to A HLA period when

1:18

I joined , um, PYA and

1:21

as you probably know, PYA , um,

1:23

has been a sponsor of , uh, A

1:25

HLA for many, many years now. And

1:28

this conference was held exactly

1:30

in New Orleans as well. So

1:32

that was my first introduction

1:35

to , um, cafe

1:37

Dumont and Benet and all of that as

1:39

well. So I have a lot of <laugh> memories

1:42

of that. Um, it was , um,

1:46

actually, you know, I think it was also the

1:49

first time that I

1:52

had sort of, you know, understood

1:54

how folks come together, consultants,

1:58

or in-house council , outside council , that

2:00

we all come together and then we

2:02

are able to share our experiences

2:05

to the audience. So,

2:07

you know, the next time I had met you, I

2:10

thought about, okay, how, how would

2:12

it be if Gina and I actually could present

2:14

on, on topics at HLA ? And

2:16

, you know, 10 years later we are still doing this

2:18

together, which is really great.

2:20

Absolutely. I , I couldn't agree more . I

2:22

Was thinking , you know, I'm kind of rambling already, but

2:24

I realized I don't think we have introduced ourselves

2:27

to our listeners. So, Gina, do

2:29

you want go ahead first?

2:30

Sure. Uh, so I am Gina Gunville.

2:32

I'm a shareholder with the law firm of

2:35

polsinelli based in Chicago, but I

2:37

work with clients across the country.

2:40

Uh , clients include academic medical centers,

2:43

health systems provider organizations,

2:45

and a variety of healthcare providers. And

2:48

I work with them on a variety

2:50

of strategic transactions, partnerships,

2:53

joint venture opportunities. Um

2:55

, my practice is really focused on transactional

2:57

work, supporting those transactions, as

3:00

well as then identifying potential

3:02

regulatory issues and then , uh, assuring

3:05

you know, that the transactions close , timely, relevant

3:07

to those regulatory timelines and needs

3:09

that, you know, need to be met along

3:12

the way in the course of those deals. And

3:14

Anna, do you wanna introduce yourself?

3:16

Absolutely. Yeah . So I'm Anna Bart . I'm

3:19

a shareholder at PYA. Um,

3:21

PYA is , um, you know, sort of

3:23

what I would categorize as a healthcare consulting

3:26

firm, but we are set up as an accounting

3:28

audit tax practice as well. Um,

3:30

but healthcare forms a , a vast

3:33

majority of the work that we do. And

3:35

within healthcare, you know, we support a

3:38

whole host of range of providers.

3:40

So whether it's academic medical centers , um,

3:43

large health systems, physician

3:46

practices , um, and we help

3:48

with physician arrangements. So

3:50

I specifically , um, lead

3:52

our business valuation service line.

3:55

So , um, like Gina , I do

3:57

work in the transaction space as well,

4:00

just helping our clients understand

4:03

fair market value concerns , um,

4:06

help make deals happen while

4:08

providing independent objective

4:11

feedback on fair market value considerations.

4:14

Um , PYA overall , um,

4:17

we also support our clients with,

4:19

you know, their compliance needs, whether

4:22

it's regulatory compliance, coding

4:24

compliance, we have , uh, IT

4:27

practice that focuses on security,

4:30

HIPAA requirements, so on , so

4:32

forth. And obviously anything related

4:35

to strategy transaction support, we

4:37

help that as well. Um, and

4:39

I sit in Charlotte, North

4:41

Carolina , um, and , um, have

4:44

been with the firm for 10 years now. Um,

4:47

so Gina, if you , um,

4:50

wanna maybe talk a little bit about, I,

4:52

I think this is, is this not the first time

4:54

that both the physician hospital

4:57

law conference and the A MC

4:59

conference are actually going to be pulled

5:01

together as one?

5:03

That's right. Yeah, that's right. So, you know,

5:05

we, we've referred to it a bit as the

5:07

A MC conference, but historically

5:09

, uh, both the A MC conference

5:12

and the Physician Hospital Law

5:14

Conference for HLA have been held at a similar

5:16

time of year and A HLA

5:19

now , um, you know, in order to create a more

5:21

collaborative and excellent

5:23

learning opportunity for attendees for those

5:25

conferences, has combined those

5:27

conferences together. And so the conference

5:30

this year is called Legal Strategies

5:32

for AMCs Physicians and Hospitals.

5:35

And I'm really excited about this new format because

5:38

I've attended both conferences

5:40

separately, and I think it

5:42

, there's, there's a lot of , um, you know , alignment

5:44

there among attendees

5:47

and there will be more

5:49

faces at this conference, Uhhuh <affirmative> , I think, as a result

5:51

to interact with. But I also

5:54

think that the intimate nature of

5:57

the A MC conference will be preserved.

5:59

That's been a really nice environment

6:01

when, as you mentioned, you've attended in the past

6:03

and I've attended in the past. And I'm just looking

6:05

forward to that, continuing with also

6:08

this exciting change , um,

6:10

and expansion to the formatting.

6:12

Yeah, yeah, yeah, you're right about,

6:14

you know, how intimate the A MC conferences

6:17

were, but , um, I

6:19

just looked at the , um, invite

6:21

list as well, and there are gonna be so many familiar

6:24

faces, it'll be such a great opportunity to,

6:26

to be able to catch up with everyone as well.

6:29

Um, so wanna talk a little bit about what we would

6:31

be presenting on , um, at the

6:33

conference? Gina, you wanna sort of kick us off

6:35

, um, with that?

6:37

Sure, absolutely. So this year

6:39

we're speaking on service line carve

6:41

outs. Our session is entitled a

6:44

slice of the A MC pie , legal

6:46

and Value Considerations around service line

6:48

carve outs. And when Ann and

6:50

I were looking at, you know, you and I at

6:52

this possible topics, we

6:54

chose this one , um, really is

6:57

timely because of what we've been seeing lately

6:59

as we've been working with clients on carve out

7:01

transactions. And, you know, usually

7:04

a client has identified a need to partner with

7:06

an organization with some expertise for

7:09

a certain service line. And while that

7:11

concept isn't new, you know , as

7:14

you know, pressures continue in healthcare , um,

7:16

to rise with regard to controlling costs and

7:19

improving reimbursement opportunities. And

7:21

so we're seeing urgency there. As

7:24

you know, leaders within AMCs

7:26

are continuing to look for ways to reduce

7:28

their overhead , um, eliminate

7:31

items that aren't profitable on site

7:33

and move them out of house , um,

7:35

and out of higher cost facilities and

7:37

really looking at relationships , um, that

7:39

make better sense , uh, for their organizations.

7:43

Long-term . Mm-Hmm, <affirmative> . And so, you know, and

7:46

I just, I think it's great you and I, when

7:48

we collaborate on different

7:50

topics, it's so nice to information share

7:52

as well as to what we're seeing from our clients, and then also

7:55

share best practices in those transactions. And

7:57

so that's what we're hoping to bring, you

8:00

know, to our audience , um, as part of this

8:02

session , um, as a way, you know, to help

8:04

AMCs focus on their core businesses and strategies.

8:08

Um, a couple of examples , um, that, you

8:10

know, you and I were kind of discussing were, for

8:12

example, carving out a hospice care services

8:15

line to be managed by a trusted community

8:17

partner or , um, for

8:19

example, expanding a hospital at home

8:21

program. And that ultimately

8:24

we're kind working with our clients on,

8:26

you know, those relationships that allow

8:29

them to bring in some additional expertise and

8:31

potential to improve , um, you know, reimbursement

8:34

overall while, you know, controlling

8:36

costs related to what they're carving out the service

8:39

line that they're carving out. Mm-Hmm , <affirmative> . Um

8:41

, and before I get into a little bit more detail

8:43

about the outline, wanted to pause there, see

8:45

if you had anything else you wanted to add on the kind of the choosing

8:47

of the topic.

8:49

Yeah, yeah, actually, it's, it's very

8:51

interesting that, you know , uh, I

8:53

, I know we, we titled it a

8:56

MC , um, a potential for

8:58

carve-outs, but actually it's, it doesn't matter

9:00

whether it's an academic medical center or a

9:02

, um, hospital system that's

9:04

not affiliated with academic, right? Um,

9:07

in, in all of these instances, there are

9:09

going to be, you know , they're providing

9:11

some service right now, it

9:14

may fit within their , um, core

9:16

strategy, but they may need a partner or

9:18

maybe they discover that they're not the ideal

9:21

people to provide that service . Somebody

9:23

will do a much better job out there in the, in

9:25

the community. And so they're

9:27

trying to assess what's the next best step. And

9:30

, um, you know, like those examples that

9:32

you mentioned , uh, I've often sort

9:34

of been brought in, our team has been brought in

9:37

to , you know, perform a valuation

9:39

for us. We wanna go ahead and do this, and they have

9:41

some, something in their mind about next steps and

9:43

, but then the valuation informs them, or

9:45

, you know, maybe you wanna look at it a different

9:47

way. So it's been very interesting

9:50

for us to come in there as

9:52

advisors and kind of start down one path

9:54

and then try to , uh, discover all

9:56

these , um, different creative ways to,

9:59

to move forward as well. So I'm

10:01

looking forward to , um, joining you

10:03

to provide some real life examples for them,

10:06

some case studies for our, our

10:08

, um, audience as well.

10:11

Absolutely. And just to give a, a

10:13

very high level preview of some of the content

10:15

, uh, you know, our

10:18

panel involves an attorney and

10:21

evaluation expert, and we,

10:23

we think that that's really applicable in these transactions

10:25

because they require, you know , effective

10:28

deal management, understanding , uh,

10:30

the legal and valuation considerations

10:33

, um, because of their complexity.

10:35

Um, and also understanding how to appropriately manage

10:38

the pacing of the transaction to meet,

10:40

you know, certain timelines and client expectations.

10:43

And so really I

10:45

think when we present together, we talk about

10:48

that importance of , um, you

10:50

know, the timing, your valuation

10:52

correctly, getting all of your ducks

10:55

in a row, so to speak , um, and

10:57

understanding the challenge of identifying,

10:59

especially with these carve out transactions

11:01

, um, you know,

11:04

all of the associated assets of

11:06

the service line, especially understanding

11:09

that when you're trying to carve something out , um,

11:11

there's a potential for a lot of overlap

11:14

and shared services , um, if,

11:17

if the service line hasn't been operated within a separate division,

11:19

for example. And , um, the

11:22

driver for that from a legal

11:24

perspective is, you know, for compliance

11:27

reasons with our fraud and abuse

11:29

laws that would require any contributions

11:31

of assets be paid for at

11:33

fair market value. And so that's

11:35

a bit of a preview of, you know, some of the, one

11:38

of the main legal considerations we're

11:40

going to discuss during our panels , uh,

11:42

federal anti-kickback statute of compliance,

11:44

for example. And also we'll talk

11:46

a bit about , um, you know,

11:48

any applicable notification

11:51

requirements within your jurisdiction.

11:54

Um, for healthcare transactions generally, we

11:56

have a lot of activity now on , um,

11:59

you know, state , on a state by state

12:01

basis with regard to , um, you

12:03

know, notices and approvals that might be required

12:06

for certain types of transactions.

12:08

And depending on, you know, the threshold

12:10

value of those transactions. And

12:12

, um, so we'll cover , um, some of

12:14

those , um, consent and approval requirements

12:17

as well. And then , um, discuss,

12:19

you know, licensing and permitting , um,

12:22

in addition. Um, and

12:24

then also too on the fair market value

12:26

standpoint , um, we'll touch on , um,

12:29

tax related considerations since

12:31

, um, generally , um, academic medical

12:33

centers where , you know, if we're talking about other

12:35

, um, nonprofit health systems doing

12:37

carve out transactions as well , um,

12:40

their tax exempt organizations and as such would

12:42

be constrained by certain tax laws. And so we'll

12:45

plan to cover that substantively within

12:47

our session as well. And then , um,

12:49

and then also give the audience

12:52

, um, from a practical standpoint , uh,

12:54

a snapshot of what the transaction can

12:56

look like from a drafting documents

12:59

perspective. And so we'll touch on key

13:01

areas within those documents that need to be addressed

13:03

in the course of these transactions. Um,

13:07

some examples of that , um, would

13:09

be, for example, human resources related

13:11

issues, when we're talking about carving

13:13

out a service line , um, there

13:15

could be many individuals that

13:18

are providing multiple services , um,

13:20

across service, different service lines within , um,

13:23

the medical setting. And so figuring out,

13:26

you know, which of which shared employees would

13:29

transfer over as part of the transaction. Um,

13:32

intellectual properties. Another , um,

13:35

key that we'll talk about , um, the

13:37

what type of , um, you

13:39

know, branding or licensing is required

13:42

, uh, with regard to carving

13:44

out the service line. And, and so I,

13:46

our hope is we'll give you a kind of

13:49

a holistic view of what a service

13:51

line carve out is , um, the

13:55

things to be aware of when you're working on

13:57

a transaction like that. Um, some,

13:59

and some practical takeaways as to, you

14:01

know, all the different , um, issues

14:03

that need to be addressed within the course of your

14:06

documentation, as well as

14:08

then some subject matter experts that likely

14:10

need to weigh in and then , um,

14:12

hopefully give the attendees a , a really

14:15

good sense of , um, what's

14:17

possible and , uh, a way forward on

14:19

those types of transactions. Um, and

14:22

then Anna, do you wanna talk a little bit about , um, you

14:24

know, from the valuation standpoint,

14:26

what, what you might touch on within the session?

14:29

Yeah, yeah, sure. Um, you

14:31

know, the , you, you talked about fraud and

14:33

abuse laws, how to make sure that the arrangement

14:35

is, is , is within fair market value. I

14:37

think , um, one of the

14:39

key , um, ideas

14:41

that, that I would like to share is

14:44

there are gonna be several arrangements. You

14:46

know, you may have a service line car out , but

14:48

along with that transaction, it

14:51

is quite common to see additional

14:53

arrangements that are set up. So

14:55

to your point around human resources,

14:58

maybe there is a PSA or

15:00

an MSA or some other kind of agreement

15:03

that is set up. And then those agreements

15:05

also need to be assessed for fair

15:07

market value at that point, right? So

15:10

there are several components, the ip, so

15:12

branding or , you know, what is the fair market value

15:14

price to pay to be able to co-brand,

15:16

for example, under the new service line , um,

15:19

that's being carved out. So, so we'll talk

15:21

a lot about , um, that as well. So

15:24

, um, I think you covered,

15:26

you covered what we'll be presenting quite , uh,

15:29

quite well.

15:30

Well, we're, we , as I said, I think you and

15:33

I are looking forward to it very much, and with

15:35

that aim of , um, leading

15:37

attendees a a bit more informed about,

15:39

about what to be aware of. And then as

15:42

you mentioned too , covering , um, kind of all

15:44

of the different ways in which you need to assure

15:46

that the terms of your , uh,

15:48

definitive agreements support fair

15:50

market value of the overall transaction.

15:52

Yeah. Yeah. So are you gonna do anything fun

15:55

in New Orleans or Gina?

15:57

I, I hope so. I, you know, in

15:59

addition to it being a fun time of year to

16:02

visit the area around Mardi Gras

16:04

, um, I, I always

16:06

enjoy , um, the food. I mean,

16:08

it's just a fantastic place to spend

16:11

some time once our sessions are wrapped

16:13

, um, meeting up with old

16:15

and new friends and also to

16:17

have taken the opportunity in the past to go on walking

16:20

tours and learn a bit more about the fantastic city

16:22

as well. So I will be

16:24

getting to planning that part as soon

16:26

as I think I get all my notes in order for

16:28

this session. <laugh>

16:30

<laugh> . Yeah , likewise, likewise.

16:32

So I , um, am looking forward to

16:34

this and , um, uh, really

16:37

everybody, you know, feel free to come

16:39

out to us and ask questions, and we

16:41

look forward to many of you attending

16:44

our sessions. I think we are doing it once

16:46

in the morning and once in the afternoon on

16:48

the Tuesday of the conference, is what I

16:51

remember. So plenty of opportunities. And

16:54

, um, I just wanna say

16:56

I'm, I'm very excited and look forward to

16:58

it.

16:59

Same here. Uh , it's such a great organization,

17:01

a HLA, and a great conference, and

17:04

we, we are really looking forward to meeting

17:07

everyone and seeing everyone there.

17:15

Thank you for listening. If you enjoy

17:17

this episode, be sure to subscribe to

17:20

a HLA speaking of health law wherever

17:22

you get your podcasts. To

17:24

learn more about a HLA and the educational

17:27

resources available to the health law community,

17:29

visit American health law.org.