Case Studies

Jury Rules for EBG in Defamation Trial

Epstein Becker Green attorneys obtained a jury verdict on November 19, 2008, dismissing a defamation action brought by a former executive against one of New York City's largest hospitals. The action was in federal court in Central Islip, New York.

The plaintiff had been the hospital's Executive Vice President for finance, billing and collections, information technology and strategic planning. He had left the hospital's employ in 2000. Thereafter, the New York Attorney General ("AG") investigated billing for Medicaid patients for services rendered at part-time clinics operated by the hospital and alleged that the hospital fraudulently overbilled the State. The overbilling allegations were settled for more than $75 million in 2005.

As part of the settlement, the AG filed a civil complaint alleging that the hospital had engaged in Medicaid fraud and that certain named individuals, including the plaintiff, were principals in perpetrating the fraud. In addition, the AG required that the hospital provide the AG with a written apology for "misconduct" of unnamed "former executives." The AG announced the settlement in a press release on his office's Web Site, which quoted the apology and linked to the complaint—which, unlike the apology, identified plaintiff by name.

The next day, the AG's press release was reported in the press and plaintiff's name was mentioned in connection with the apology. The plaintiff's then-current employer, another hospital, fired him on the spot, stating publicly that he was fired because of the AG's allegations.

Epstein Becker Green's client was then sued for defamation as a result of the AG's public dissemination of its apology. We defended on the ground that the re-publication of the alleged defamation by the AG did not constitute publication by the hospital. Plaintiff argued that because some of the language of the apology had been drafted by the hospital during negotiations, the publication should be considered at least a joint publication. The jury decided, however, that the hospital's involvement in the drafting process did not constitute a publication by the hospital, and as a result, the plaintiff did not prove a viable defamation claim.

The Epstein Becker Green team included New York Attorneys Kenneth J. Kelly, A. Jonathan Trafimow, and Tracey Cullen.

Epstein Becker Green Obtains Dismissal of Major Claims in ‘Excessive Force’ Suit

Epstein Becker Green's litigation team obtained a dismissal of the major claims in an "excessive force" lawsuit brought in federal court by a New York Post newspaper photographer against a major hospital after the reporter was arrested by special patrolmen employed by the hospital. The photographer refused an order to leave the hospital's property (the steps leading to a hospital building) where he was waiting to photograph a celebrity who was planning to visit his brother, a patient. The Court held that, because the First Amendment did not give the photographer the right to enter private property, the order to leave was valid. When he refused, the officers had the right to exercise their state-granted power to arrest him for trespass and resisting arrest. The Court also determined based on video footage captured by several surveillance cameras and the photographer's own audio recording of the incident that there was no genuine issue of material fact and that the officers as a matter of law did not use excessive force, even though the photographer sustained a shoulder injury. Kalfus v. The New York and Presbyterian Hospital, et al., 07 Civ 11455(DAB) (3/31/10).

The Epstein Becker Green team representing the client-hospital included New York Litigation attorney Kenneth J. Kelly.

Epstein Becker Green Obtains Protective Order

On April 6, 2010, Epstein Becker Green achieved a big win for its client, the Mount Sinai School of Medicine (the "Medical School"). Defense counsel representing Kentile Floors, a defendant in an asbestos personal injury litigation, subpoenaed the Medical School seeking all of the research records and personal correspondence of Dr. Irving Selikoff, a now deceased former member of the Medical School's faculty. Dr. Selikoff's work is world renown as he was the first to identify the link between asbestos exposure and disease. Defense lawyers have striven for years to discredit Dr. Selikoff's research in the asbestos litigation. The Medical School is constantly fending off these subpoenas and dealing with related litigation. Other research institutions face similar challenges and have expressed the concern that a court ruling requiring the Medical School to produce the private correspondence and memoranda of a faculty member not otherwise involved in the underlying litigation would have a chilling effect on the willingness of other scientists whose research would benefit public health or enhance workplace safety. Epstein Becker Green successfully fought back this latest effort and was rewarded with an excellent and strongly worded decision that provides most significantly that the:

expense Mt. Sinai would incur as a result of such a broad interpretation of the subpoena could well discourage other institutions from conducting vital health and safety research. Other scholars in the laboratory may fear that their unpublished notes, observations and ideas could be released to the public as a result of litigation. Although a scholar's right to academic freedom is not absolute, it should factor into a court's analysis on whether forced disclosure of documents in permissible (see, In R.J. Reynolds Tobacco Co., 136 Misc.2d supra at 287).

The Epstein Becker Green team that represented the Medical School included New York attorneys William A. Ruskin, Beth Essig, and Victoria M. Sloan.

Epstein Becker Green Obtains Dismissal of Claims Seeking to Limit Health Plan Access to Information

On January 31, 2011, Epstein Becker Green obtained a dismissal of a case brought by two plaintiffs—a state psychological association and an individual psychologist—seeking broad limitations, through the application of the patient-psychologist privilege, on the information that a health benefits plan could seek from or concerning insureds to establish the medical necessity of initial or continued mental health treatment. The New Jersey court found that neither plaintiff had a direct injury or associational or third-party standing and questions of privilege needed to be determined in the sort of case-by-case approach that precluded the granting of broad, general relief against the health benefits plan or those providing administrative or utilization management review services to the plan.

The Epstein Becker Green team representing those providing administrative or utilization management review services to the plan included New Jersey Litigation attorney James P. Flynn.

Epstein Becker Green Successfully Represents Sibley Memorial Hospital in Affiliation with Johns Hopkins Health System

On November 1, 2010, Sibley Memorial Hospital ("Sibley") became a member subsidiary of the Johns Hopkins Health System ("JHHS"), joining the Johns Hopkins Hospital, Johns Hopkins Bayview Medical Center, Howard County General Hospital, and Suburban Hospital. Epstein Becker Green represented Sibley in the transaction, and represented both JHHS and Sibley with respect to the required certificate of need approval from the District of Columbia.

The Epstein Becker Green team was led by Douglas A. Hastings, and included Dale C. Van Demark, Clifford E. Barnes, Joel C. Rush, Patricia M. Wagner, Jason B. Caron, Julia E. Loyd, Dawn R. Helak, and Ross K. Friedberg. Clifford E. Barnes led the certificate of need regulatory process.

Epstein Becker Green Helps Health Insurance Carrier Obtain Reversal of Premium Rate Disapprovals

On August 6, 2010, Epstein Becker Green helped its client Fallon Community Health Plan, Inc. ("FCHP") obtain the reversal of the Massachusetts Division of Insurance ("Division") disapproval of certain of FCHP's premium rate increases. The Division had previously disapproved all premium rate increases filed by FCHP and other health insurance carriers for small business and individual customers that exceeded 7.7 percent — which was 150 percent of the New England Medical CPI for 2009. FCHP and the other affected health insurance carriers filed administrative appeals of the Division's disapprovals of their premium rates. The Massachusetts Attorney General's Office intervened in the administrative hearings on behalf of consumers' interests. Epstein Becker Green, which along with local counsel represented FCHP, presented documentation and testimony justifying FCHP's rates from actuaries, provider contracting executives, and other witnesses.

After examining the evidence, the presiding hearing officers reversed the Division's disapprovals of FCHP's premium rates, finding, among other factors, that FCHP had made reasonable efforts to keep costs down through provider contracting, and utilization control and cost containment programs. The presiding hearing officers also adopted EBG's arguments that the Division's reliance on Medical CPI to reject premium rates was flawed. As a result of the reversals, FCHP was able to implement its filed rate increases through the end of 2010.

Epstein Becker Green and its attorneys Jesse M. Caplan, George B. Breen, and Robert E. Wanerman of the Washington, D.C., office served as co-counsel, along with local counsel Bowditch & Dewey, in representing FCHP.

Epstein Becker Green Negotiates Very Favorable Settlement of False Claims Act Case

On February 2, 2010, Epstein Becker Green attorneys successfully executed a very favorable settlement for their client, AtriCure Inc., in a False Claims Act (FCA) case that began with a qui tam relator's charges filed in 2007. AtriCure is a developer and manufacturer of cardiac surgical ablation devices.

This case presented sophisticated claims relating to alleged improper off-label promotion. This is an issue that has become a high priority for Department of Justice enforcement of which both drug and device manufacturers and distributors should be aware.

The settlement, based on an ability-to-pay methodology accepted by the government, requires AtriCure to pay total of $3.8 million, plus interest, periodically over five years; resolves issues of potential FCA and common law violations relating to the marketing practices of AtriCure's surgical ablation devices; and includes AtriCure's declaration that the company and its employees haven't engaged in any wrongdoing or illegal activity. The settlement agreement has been approved and resolves a related qui tam matter, which Epstein Becker Green attorneys have been handling, regarding AtriCure's marketing of the devices. (Epstein Becker Green also represents AtriCure in a related and ongoing private securities class action.) Additionally, AtriCure signed a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services.

The Epstein Becker Green team that represented AtriCure was led by Stuart M. Gerson, a leading litigator and national authority on the FCA.

Epstein Becker Green Obtains Dismissal of Drug Suit

On October 5, 2011, Epstein Becker Green obtained summary judgment on behalf of its client Sunovion Pharmaceuticals ("Sunovion") after oral argument before the Hon. Stefan R. Underhill in a U.S. District Court in Bridgeport, Connecticut, in the case of Swoverland v. GlaxoSmithKline.

The plaintiff alleged that his use in combination of Sunovion's Lunesta, a sleep aid, and GlaxoSmithKline's ("GSK's") Paxil, an anti-depressant, caused depression, erratic behavior, and suicidal ideation, which resulted in an unsuccessful attempt to kill both himself and his daughter. As a result of the incident, plaintiff was sentenced to prison and forfeited his position as a prison guard. Epstein Becker Green defended the case on the basis that Sunovion had adequately warned of the drug's potential risks and that there was no causal connection between any alleged failure to warn and the treating physician's prescription of the drug.

In granting summary judgment to Sunovion, the court reaffirmed Connecticut's adherence to the "learned intermediary doctrine," which provides that adequate warnings to a prescribing physician makes it unnecessary for a manufacturer of a prescription drug to warn patients directly. Further, the court rejected plaintiff's assertion that the learned intermediary doctrine should not apply in this case either because Lunesta directly advertised to the patient or over promoted the product. The court held that there was no factual basis in the record to support the application of either of these exceptions to the learned intermediary doctrine and that, as a matter of law, Connecticut did not recognize these exceptions.

The Epstein Becker Green team that represented Sunovion included New York attorneys William A. Ruskin and Victoria M. Sloan.

Epstein Becker Green Successfully Negotiates Medicaid Managed Care Program Contract for Client Based in Puerto Rico

In October 2011, Epstein Becker Green represented Triple-S Management Corp. ("Triple-S") in the negotiation of a contract with the Puerto Rico Health Administration ("ASES") to administer the Medicaid managed care ("Mi Salud") program in five out of nine regions in Puerto Rico. Failure to reach an agreement on the terms of the contract would have left over 800,000 people without coverage, beginning November 1, 2011. Triple-S agreed to step in and assume these regions of the Mi Salud program after contractual issues between ASES and the current MCO contractor could not be resolved.

The Epstein Becker Green team representing Triple-S included Philip D. Mitchell of the Newark office and Jane L. Kuesel and Joseph J. Kempf, Jr., of the New York office.

Epstein Becker Green Obtains Dismissal of ERISA Action Against Health Care Benefits Companies

On March 13, 2012, Epstein Becker Green obtained the dismissal of an action brought by a chiropractic practice group against Aetna Inc. and certain subsidiaries alleging that the defendants breached fiduciary duties imposed by ERISA and tortiously interfered with the practice's patients by not paying for chiropractic treatment they claimed was covered by their patients' employee health benefit plans. Chief Judge Carol Amon of the U.S. District Court in Brooklyn held that although pleaded as such, the breach of fiduciary duty claims were in actuality claims for benefits, and that such claims could be brought only against the benefit plans themselves or the named plan administrator. Since none of the defendants was a plan administrator, but merely rendered "third-party administrator" or claims processing services, they could not be sued under ERISA.

The court also held that if any of the defendants owed any fiduciary duties arising under ERISA, such duties ran to the plans themselves, and plan participants, such as plaintiffs' patients, could not assert such fiduciary breach claims in order to recover any money to cover their own medical expenses.

Lastly, the court held that the plaintiffs' state law claim for interference with the practice's business necessarily included analyzing the patients' claims for benefits, which in turn would involve interpretation of the terms of the benefit plans, and as a result would require examination of rights and obligations created by ERISA. Accordingly, the court held that ERISA preempted the state law claim and the claim was dismissed.

The EBG team representing the defendants was New York Litigation attorneys Kenneth J. Kelly and Diana C. Gomprecht. Staten Island Chiropractic Assoc., PLLC v. Aetna, Inc., 09-CV-2776(CBA) (E.D.N.Y. 3/12/12).

Second Circuit Affirms Dismissal of Defamation/Breach of Contract Suit Against Epstein Becker Green Medical School Client

In a decision having significance for universities and medical schools, the U.S. Court of Appeals for the Second Circuit upheld the dismissal of a complaint for defamation, discrimination, and breach of contract brought by a medical doctor whose employment was terminated by Mt. Sinai School of Medicine. The plaintiff, a Chinese medical doctor who primarily engaged in cancer research, was accused by one of his subordinates of improperly manipulating research data. After a lengthy formal investigation conducted by a panel of his peers confirmed the allegations, the Dean discharged him, and the dismissal was upheld by a different peer review panel.

The doctor alleged that he was defamed by both the subordinate and the peers, but the court held that all statements made before or during the investigation were qualifiedly protected under the "common interest" privilege, and that the plaintiff had failed to sufficiently allege malice overcoming the privilege. Also, the court held that the plaintiff failed to offer sufficient proof that the dismissal was motivated by anti-Chinese animus, despite comments made about the plaintiff's Chinese medical school training, culture, and background.

Most important for academic institutions, the court reaffirmed the rule in New York that a professor cannot bring a breach of contract law suit arising from discipline, termination, or denial of tenure when such decisions involve peer review decisions under university policies, since such decisions involve weighing the institution's values as well as the individual's contractual rights. Such claims may be brought only by a mandamus-type proceeding where court review of the determination is based on an "arbitrary and capricious" standard.

The Epstein Becker Green team included Kenneth J. Kelly and Jennifer M. Horowitz of the New York office. Chao v. The Mount Sinai Hospital, et al., Index No. 11-1328-cv (2d Cir. 4/17/12).

Epstein Becker Green Closes $152 Million Sale of Health Care System

Epstein Becker Green attorneys successfully closed the sale of client Moses Taylor Health Care System, a hospital system based in Scranton, Pennsylvania, to Community Health Systems, Inc., one of the nation's largest for-profit hospital systems. The sale became effective on January 1, 2012. CHS agreed to pay the sale price of $152 million and commit to, among other things, invest at least $60 million in Moses Taylor's operations.

Epstein Becker Green acted as transaction, regulatory, and antitrust counsel.

The Epstein Becker Green team was led by Doug Hastings and Dale C. Van Demark and included George B. Breen; Michelle Capezza; Jason B. Caron; Tanya Vanderbilt Cramer; Ross K. Friedberg; J. Andrew Lemons; Stephanie G. Lerman; Katherine R. Lofft; Julia E. Loyd; Kara M. Maciel; David E. Matyas; Colin G. McCulloch; Jonah D. Retzinger; Tamar R. Rosenberg; Joel C. Rush; Jordan B. Schwartz; Patricia M. Wagner; Dawn R. Helak; and Alan B. Wynne.

Epstein Becker Green Closes Affiliation of County Hospital System with Community Health Network

Epstein Becker Green attorneys successfully closed the affiliation of Howard Regional Health System, a county hospital system based in Kokomo, Indiana, with client Community Health Network, Inc., one of Indiana's largest health care systems. The affiliation became effective on July 1, 2012, with Community Howard Regional Health, Inc., becoming the newest member of the CHNw Network of hospitals across central Indiana. Epstein Becker Green acted as transaction counsel.

The Epstein Becker Green team was led by Joel C. Rush and Katherine R. Lofft and included Daniel E. Gospin; Gretchen Harders; Julia E. Loyd; David E. Matyas; Colin G. McCulloch; Tamar R. Rosenberg; Dale C. Van Demark; Patricia M. Wagner; Dawn R. Helak; and Alan B. Wynne.

Epstein Becker Green Assists Client in $5 Billion Acquisition of Medical Therapy Company

A team of Epstein Becker Green attorneys represented Apax Partners LLP ("Apax"), a private-equity firm, as health care regulatory counsel in an acquisition of Kinetic Concepts Inc. ("KCI"). The purchasers included Apax and two Canadian pension funds. The deal, valued at more than $5 billion, closed on November 4, 2011.

The Epstein Becker Green team was led by Mark E. Lutes of the Washington, DC, office, and included Daniel G. Gottlieb, Benjamin S. Martin, Lesley R. Yeung, J. Andrew Lemons, James A. Boiani, Shawn M. Gilman, Amy F. Lerman, Julie E. Loyd, and Adam C. Solander.

Epstein Becker Green Represents Medical System in Asset Purchase of St. Joseph’s Medical Center in Maryland

On November 30, 2012, Epstein Becker Green client University of Maryland Medical System ("UMMS") signed an asset purchase agreement to acquire Saint Joseph's Medical Center ("St. Joseph's"), a 263-bed nonprofit, regional medical center located in Towson, Maryland, from Catholic Health Initiatives ("CHI"). UMMS also committed to capital improvements and programmatic development at St. Joseph's. The transaction took effect on December 1, 2012.

Epstein Becker Green's representation of UMMS in this matter included, among other things:

  • providing assistance in due diligence;
  • transitioning Saint Joseph's compliance efforts;
  • counseling on antitrust matters and helping procure an early termination of the Hart-Scott-Rodino review period; and
  • assisting in-house counsel in evaluating and negotiating disclosure schedules and transition matters.

The Epstein Becker Green team representing UMMS included Dale C. Van Demark, Jason B. Caron, Joel C. Rush, Dawn R. Helak, Patricia M. Wagner, Ross K. Friedberg, and Colin G. McCulloch.

Epstein Becker Green Convinces Plan Review Committee to Overturn Termination of Participating Physician Group Services Agreement

On April 29, 2013, Epstein Becker Green achieved a major victory when the Plan Review Committee of L.A. Care Health Plan ("L.A. Care") found that L.A. Care's termination of the Participating Physician Group Services Agreement ("Agreement") with Epstein Becker Green client Accountable Health Care ("AHC") was procedurally unfair.

L.A. Care terminated the Agreement under a "without cause" provision and did not contend that AHC was in breach of the Agreement. Under Potvin v. Metropolitan Life Ins. Co., 22 Cal.4th 1060 (2000), California provides a common law fair hearing right to health care providers even in the event of a "without cause" termination. Arbitrary decisions and the denial of fair procedure are prohibited by Potvin. Contractual provisions allowing termination "without cause" are unenforceable to the extent that they do not provide fair procedure. Under Potvin, the termination of a provider's agreement must be both substantively rational and procedurally fair.

Epstein Becker Green argued on behalf of AHC that L.A. Care acted contrary to its own Fair Hearing Procedure and the legal principles of Potvin by issuing a notice of termination of the Agreement prior to the fair hearing and a decision by the Plan Review Committee, even though, at the hearing, L.A. Care argued that its decision was based on a cease-and-desist order against AHC that was filed by the California Department of Managed Health Care. Although the Fair Hearing Procedure provides that the hearing process must precede any issuance of a notice of termination under a provider contract, the termination notice and related correspondence made clear that L.A. Care had already reached a decision to terminate the Agreement at the time that the notice was provided to AHC. In addition, the notice failed to include the specific reasons for the termination, a description of any policies and procedures, or any other criteria used in making the determination, as required by the Fair Hearing Procedure.

The Plan Review Committee voted unanimously in finding that the L.A. Care termination notice was procedurally unfair because it was inconsistent with the requirements of the Fair Hearing Procedure and had been issued prior to the completion of the fair hearing process.

The Epstein Becker Green team representing AHC included Los Angeles attorneys David Jacobs, Paul C. Burkholder, and J. Susan Graham.

EBG, BD Collaborate in Trade Secret Enforcement

Epstein Becker Green's timely filed civil action on behalf of Becton, Dickinson & Company ("BD") led to a May 31, 2013, restraining order against Ketankumar Maniar, a former BD employee planning to leave the country in days with BD trade secrets in his possession. The facts developed by BD and EBG, along with the civil court filings, were provided to federal law enforcement officials. Realizing that the material Maniar had taken amounted to a "tool kit" for manufacturing a soon-to-be-released disposable pre-filled pen injector in which BD had invested substantial time and money, federal agents opened an investigation. They later executed a search warrant to retrieve from Maniar a number of storage devices and, on June 5, 2013, arrested him for criminal violation of 18 U.S.C. Section 1832. The arrest was widely reported locally, nationally, and internationally after it was announced by the U.S. Attorney for District of New Jersey and the FBI. Later, EBG attorneys obtained a permanent injunction in the civil matter, and Maniar was convicted, sentenced, imprisoned, and deported on criminal charges concerning his crimes against BD as well as on an additional count concerning a former employer, which was uncovered as a direct result of EBG’s investigation. The conviction was also widely reported.

The EBG team included attorneys James P. Flynn, Daniel R. Levy, and Amy E. Hatcher.

New Jersey Appellate Court Dismisses Suit Against Medical Claims Administrators

Epstein Becker Green recently achieved a significant appellate victory for Horizon Healthcare Services Inc. ("Horizon") and Magellan Health Services Inc. ("Magellan"). On June 11, 2013, the Superior Court of New Jersey, Appellate Division, reversed a decision by the Chancery Division, Essex County, and dismissed a lawsuit brought by the New Jersey Psychological Association ("NJPA") and two patients. The complaint alleged that Horizon and Magellan had breached their agreement under the State Health Benefit Program ("SHBP"), which insures New Jersey workers, and violated the New Jersey Practicing Psychology Licensing Act ("PPLA") by requiring psychologists to disclose confidential patient treatment information before paying for the patients' mental health services.

The NJPA previously sued Horizon and Magellan in the Chancery Division, Mercer County, for violating the SHBP agreement and the PPLA. In January 2011, the Mercer judge dismissed the suit, claiming that the NJPA lacked standing to bring its claims against Horizon and Magellan because it couldn't prove that the association had suffered any harm. The NJPA filed an appeal, but then withdrew it. In July 2011, the NJPA and two patients, who were covered under SHBP plans and claimed that they were denied treatment by Horizon and Magellan because they refused to disclose confidential information, filed a second lawsuit, but, this time, in the Chancery Division, Essex County. The Essex judge declined to dismiss the suit, and Horizon and Magellan appealed.

In its decision, the Appellate Division pointed out that the plaintiffs in the Essex County suit "raise no new issues and present no new material facts that should change the decision made by the Mercer judge." Accordingly, the Appellate Division dismissed the suit, adding that the Essex judge should not have not considered the case and that the two patient-plaintiffs were required to exhaust their administrative remedies under the SHBP before seeking judicial action.

The Epstein Becker Green team included attorneys James P. Flynn and Amy E. Hatcher.

Epstein Becker Green Obtains Dismissal of Wage and Hour Class Action Brought Against Health Care Client

In March 2014, Epstein Becker Green obtained a significant victory in a wage and hour class action brought against a health care client in California. Although our client was confronted with potential exposure in the millions of dollars, the case was resolved without any payment by our client. Epstein Becker Green obtained this result by first filing motions to dismiss and to strike portions of the Complaint. Those motions were granted in part, essentially cutting the case in half (the court dismissed the class claims, subject to plaintiff's right to attempt to amend the Complaint). When the plaintiff's attorneys chose not to try to amend the Complaint during the time permitted, Epstein Becker Green was able to convince the plaintiffs to dismiss the rest of the case based on documentation showing that the remaining claims were meritless.

The Epstein Becker Green team representing our client included Adam C. Abrahms, Michael S. Kun, and Deanna L. Ballesteros.

EBG Is Victorious in Two Electronic Health Record Incentive Program Matters

In May 2014, Epstein Becker Green scored major victories in two matters relating to the Centers for Medicare & Medicaid Services ("CMS") Electronic Health Record ("EHR") Incentive Program, which provides incentive payments to eligible professionals, eligible hospitals, and critical access hospitals as they adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology.

In the first matter, Epstein Becker Green, on behalf of a hospital client, persuaded CMS to admit that it was possible to meet an EHR Incentive Program requirement in a way that was not clearly addressed in the program's rules. Specifically, the EHR Incentive Program requires the transmission of a "transition of care" document to a patient's new providers when a hospital refers or transfers the patient. Ideally, this document is sent electronically and directly to the provider. But, in certain circumstances, the EHR Incentive Program rules also allow the transition-of-care document to be provided to the patient to deliver to the next provider. Epstein Becker Green obtained a written response from CMS that Epstein Becker Green's hospital client is permitted, instead of printing this document and providing it physically to each patient, to post the document in the "patient portal"—a private website accessible by the patient that hosts copies of certain health care documents (and is itself another EHR Incentive Program requirement). This result greatly pleased our hospital client, since it was no longer required to print and hand out all of that paper.

In the second matter, Epstein Becker Green represented a small orthopedic group practice that was participating in the EHR Incentive Program, had received incentive payments, and was recently audited by one of CMS's outside auditing vendors. The audit determined that the group practice did not meet all of the "meaningful use" requirements under the EHR Incentive Program. Therefore, the group practice was ordered to refund its incentive payments, which totaled over $100,000. However, Epstein Becker Green, using its extensive knowledge of the EHR Incentive Program, was able to successfully appeal the audit determination, resulting in no recoupment by CMS of any of the payments.

The Epstein Becker Green attorney representing the hospital client and the group practice was Joshua J. Freemire.

10-Year Retaliation Litigation Ends with Trial Victory—and Counsel Fees—for Hospital

After a decade-long battle, including two trips to the New York State Supreme Court, Appellate Division, Second Department, Epstein Becker Green assisted a client, North Shore – Long Island Jewish Health System (“Hospital”), in obtaining a dismissal in July 2014 of a health care worker’s retaliation suit.

Plaintiff, a highly rated registered nurse manager, alleged that she was fired in 2004 for alerting Hospital management to systemic failures in the Hospital’s surgical instrumentation sterilization department, which she claimed put patients at risk of serious injury or death. She alleged violations of the New York whistleblower law, Lab. Law §740. The Hospital countered that, even though there were documented but isolated instances of unsterile instruments, plaintiff was let go because of her documented inability to “interact” effectually with doctors, Hospital executives, co-workers, and New York State Nurses Association (NYSNA) union representatives.

In a two-week bench trial in Nassau Supreme Court, Epstein Becker Green, on behalf of the Hospital, proved that, notwithstanding several nurses’ testimony regarding unsterile instruments, the Hospital’s procedures complied with New York Department of Health regulations governing surgical services and that plaintiff was fired for reasons unrelated to her reports. Plaintiff tried to bolster her case with the testimony of the former CEO of a Massachusetts hospital group, an MD whom plaintiff claimed was an expert as to the appropriate standards for hospital operations, including addressing issues relating to surgical instruments. Rather than calling its own expert, the Hospital discredited plaintiff’s expert.

In a rarity in employment litigation, the Court awarded the Hospital its attorneys’ fees incurred in defending the case. The Hospital’s fee application was filed with the Court in August 2014.

Epstein Becker Green attorneys Kenneth J. Kelly and Jennifer M. Horowitz represented the Hospital at trial, working with Steven M. Swirsky, who represented the Hospital through discovery, successful motions for summary judgment and to dismiss for failure to prosecute, and the two appeals to the Second Department.

Epstein Becker Green Successfully Represents Industry in Halting Anticompetitive Regulation Proposals in Texas

Attorneys from the Antitrust Counseling and Defense practice at Epstein Becker Green (“EBG”) recently coordinated with the Federal Trade Commission (“FTC”) to help an industry client block anti-competitive state board regulations.The client,a holding company that operates dental service practices, opposed regulations proposed by the Texas State Board of Dental Examiners that would have restricted dentists’ ability to contract with dental service organizations (“DSOs”) and ultimately hamper business competition.

The Texas board, largely composed of individual practitioners appointed by the governor of Texas, attempted to promulgate several regulations that would have imposed new restrictions on a dentist’s ability to enter into arrangements with DSOs for administrative and non-clinical services. This threat engendered a massive DSO industry response, as the regulatory effort imperiled the operations of scores of interstate businesses. EBG was among a number of law firms, lobbying firms, and public relations firms that were commissioned to thwart the effort.

While the Texas board’s proposals were in contention, the Supreme Court of the United States was hearing arguments in a very similar case brought by the FTC against the North Carolina State Board of Dental Examiners. The FTC alleges that the North Carolina board’s exclusive regulation is an anticompetitive effort that violates federal antitrust laws.

Noting this, the Antitrust Counseling and Defense practice at EBG consulted regularly with North Carolina counsel and the FTC and successfully prompted the FTC to make a submission in the Texas rulemaking proceeding, condemning the proposed regulations there. FTC staff, in response to a notice requesting public comments, urged the Texas board to reject two proposed rules that impose new restrictions on the ability of Texas dentists to enter into contracts with non-dentists, including DSOs, for the provision of nonclinical, administrative services.

The FTC comment, submitted by staff of the FTC’s Office of Policy Planning, Bureau of Competition, and Bureau of Economics, on October 6, 2014, stated that the rules (proposed 22 Tex. Admin. Code § 108.70 and § 108.74) seemed likely to discourage dentists from affiliating with DSOs by mandating that dentists assume responsibility for the types of functions that DSOs typically provide and by expanding the Texas board’s authority to take disciplinary action against dentists who enter into these prohibited agreements. By contrast, under the current regulations, such service agreements for many business functions—such as accounting and bookkeeping—are presumed not to violate the Texas Dental Practice Act. The comment explains that such restrictions may reduce competition, likely resulting in higher prices and reduced access to dental services, especially for underserved populations. The FTC’s comment is part of ongoing efforts to promote competition in the health care sector, which benefits consumers through lower costs, better care, and more innovation. As the FTC stated:

We have consistently maintained that the choice of business model is an important dimension of the competitive process that should not be restricted by regulation or private agreement but based on reliable evidence that regulation is reasonably necessary to achieve an important public purpose.

On November 21, 2014, the Texas board withdrew the regulatory proposals. EBG’s leadership position in this effort ultimately saved the day for its clients and others in the DSO industry.

The EBG team included Stuart M. Gerson and Patricia M. Wagner.

Epstein Becker Green Assists Medical Technology Client in $12 Billion Acquisition

Epstein Becker Green (EBG), serving as health regulatory counsel, successfully assisted its client Becton, Dickinson and Company (BD), a medical technology company, in conducting health regulatory due diligence and negotiating the terms of a purchase agreement to be used in connection with the client’s acquisition of CareFusion Corporation, an international medical products manufacturer. The purchase price was valued at $12.2 billion. This deal will substantially expand BD’s geographic reach and catalog of medical devices, enabling BD to become a world leader in medication management and patient safety solutions. BD announced the signing of the purchase agreement on October 5, 2014, and the transaction is expected to close during the first half of 2015.

EBG attorneys Bradley Merrill Thompson and Kim Tyrrell-Knott led a team that conducted the preliminary due diligence on various health regulatory issues, particularly U.S. Food and Drug Administration (FDA) and privacy and security matters. As CareFusion is operating under a consent decree from FDA, an examination of the FDA regulatory issues and assessment of CareFusion’s FDA quality system were key components of the due diligence and critical to the transaction going forward. The EBG team, working alongside transactional counsel, negotiated health regulatory terms and advised on health regulatory issues associated with the value drivers for the deal and post-closing integration plans.

In addition to Mr. Thompson and Ms. Tyrrell-Knott, the EBG team included James A. Boiani, Ali Lakhani, Benjamin M. Zegarelli, Adam C. Solander, Stuart M. Gerson, and Colleen Hittle of EBG Advisors.

Epstein Becker Green Successfully Represents Sibley Memorial Hospital in Acquisition of Certificate of Need for Three Proton Therapy Stations

On May 31, 2013, and on April 30, 2014, the State Health Planning and Development Agency for the District of Columbia approved two adult and one pediatric proton stations, respectively. Epstein Becker Green represented Sibley in a hotly contested regulatory process.

The Epstein Becker Green team was led by Clifford E. Barnes and included Jonah Retzinger and Marshall E. Jackson.

​Epstein Becker Green Successfully Represents Silver Point Capital in Acquisition of Specialty Hospitals of Washington Out of Bankruptcy

On December 18, 2014, Silver Point Capital through its wholly-owned subsidiary, DCA Acquisitions, LLC, acquired two skilled nursing facilities and two long-term acute care facilities. Epstein Becker Green represented Silver Point Capital in health regulatory aspects of the transaction.

The Epstein Becker Green team was led by Clifford E. Barnes, Lynn Shapiro Snyder, and David B. Tatge and included Daniel C. Fundakowski, David E. Matyas, Lesley Yeung, and Amy Lerman.

Epstein Becker Green Successfully Represents Doctors Community Healthcare Corporation in Acquisition of Greater Southeast Medical Center

On December 30, 1999, Doctors Community Healthcare Corporation acquired Greater Southeast Medical Center out of bankruptcy. Epstein Becker Green represented the acquirer, Doctors Community Healthcare Corporation, in all aspects of the transaction.

The Epstein Becker Green team was led Clifford E. Barnes and David B. Tatge and included a team of more than ten associates.

Epstein Becker Green Successfully Represents Children’s National Medical Center in Establishment of Children’s Pediatric Associates, P.C. LLC, and in the Acquisition of Five Pediatric Physician Practices That Became Nucleus of Children’s Pediatric Associates

In February of 1997, Children’s National Medical Center established Children’s Pediatric Associates to house its affiliated community physicians’ initiative. Over a period between February 1998 and July 1999, Children’s Pediatric Associates acquired the following practices: Drs. Smith and Guarinello, P.C.; Drs. Shapiro and Perez, P.A.; Drs. Berkowitz, Feldman, and Burgin, P.A.; Drs. Crawford and Hudson, P.C.; Drs. Feroli, Mella, Pedreira, and Wollschlaeger, P.A.

The Epstein Becker Green team was led by Clifford E. Barnes and included Brian Gradle and Regina MacAdam.

Epstein Becker Green Successfully Represents Children’s National Medical Center, Greater Southeast Community Hospital, Howard University Hospital, Providence Hospital, and Washington Hospital Center in the Establishment, Operation, and Sale of Capital Community Health Plan, a Medicaid Health Maintenance Organization

On September 19, 1995, Children’s National Medical Center, Greater Southeast Community Hospital, Howard University Hospital, Providence Hospital, and Washington Hospital Center established Capital Community Health Plan, Inc., a Medicaid health maintenance organization, and operated it until its sale to AmeriGroup Maryland, Inc., on March 25, 2002.

The Epstein Becker Green team was led by Clifford E. Barnes and included Robert Reif and Brian Gradle.

Epstein Becker Green Advises Physician Group on Affiliation with Pediatric Medical Center

Epstein Becker Green (EBG) represented Children’s & Women’s Physicians of Westchester, LLP (“CWPW”), a group of 276 physicians across 57 locations serving families throughout the New York metropolitan area, the Hudson Valley, Connecticut, and New Jersey, in a transaction that made CWPW the newest member of Boston Children’s Hospital integrated network. CWPW will continue providing care to its patients and families. In addition, CWPW’s physicians will remain on the faculty of New York Medical College, continue to staff 10 area neonatal intensive care units, and maintain their current affiliations across the region.

Since April 2014, EBG attorneys have been advising CWPW on the corporate transactional, health regulatory, tax, employment law, and employee benefits aspects of the transaction.

The EBG team included Jeffrey H. Becker, Wendy G. Marcari, and Benjamin M. Zegarelli, as well as Steven A. Ruskin and Christopher M. Locke. Also providing invaluable advice were James P. Flynn, Patricia M. Wagner, Gretchen Harders, Susan Gross Sholinsky, Jeffrey M. Landes, David E. Weiss, Emily E. Bajcsi, Arthur J. Fried, Katherine R. Lofft, Carrie Valiant, and Jason E. Christ.

Epstein Becker Green Serves as Health Care Regulatory Counsel in Acquisition of Capella Healthcare

Epstein Becker Green ("EBG") participated as health care regulatory counsel in the $900 million acquisition of Capella Healthcare Inc. (“Capella”), a private equity-owned operator of acute care facilities and one of the largest for-profit hospital companies in the United States. The purchaser was Medical Properties Trust Inc. (“MPT”), an Alabama-based real estate investment trust that acquires and develops net-leased health care facilities. The $900 million acquisition price breaks down as $600 million for Capella’s real estate and approximately $300 million for Capella’s operating entities, which will be jointly owned by MPT and Capella’s management. EBG attorneys provided health care regulatory advice and due diligence to Capella on the transaction, which is expected to close during the second half of 2015.

As a result of the Capella acquisition, MPT will obtain seven acute care hospitals in five states. In total, MPT will have 183 properties in 30 states, with acute care facilities making up a majority of its portfolio.

The EBG team included Mark E. Lutes, Joshua J. Freemire, Richard H. Hughes IV, and Evan J. Nagler.