Successfully Closing $46.5 Million Sale of Genetics Laboratory Client
On August 7, 2015, Epstein Becker Green attorneys, acting as deal counsel to the principals of Reprogenetics, LLC, successfully closed the sale of Reprogenetics’ equity to CooperSurgical, Inc., for approximately $46.5 million. Reprogenetics, headquartered in Livingston, New Jersey, is the largest genetics laboratory specializing in preimplantation genetic screening (PGS) and preimplantation genetic diagnosis (PGD) used during the in-vitro fertilization (IVF) process. CooperSurgical is one of two business units of The Cooper Companies, Inc., a global medical device company publicly traded on the NYSE Euronext (NYSE:COO). This transaction will enable CooperSurgical to strengthen its IVF business.
The Epstein Becker Green team included Purvi B. Maniar, Stephanie G. Lerman, Arthur J. Fried, Steven A. Ruskin, and Benjamin M. Zegarelli.
Epstein Becker Green Helps Finalize Key Step in Historic Merger of New Jersey Hospital Systems
Epstein Becker Green, as lead counsel, advised Barnabas Health, a seven-hospital system based in West Orange, New Jersey, on the health regulatory, organizational design, and corporate transactional aspects of a merger with Robert Wood Johnson, a New Brunswick, New Jersey-based system with four hospitals. In July 2015, these two leading health systems signed the definitive agreement that outlines the merger between Barnabas Health and Robert Wood Johnson. Once complete, the transaction will create New Jersey’s largest health care system—and one of the largest in the nation—to be known as “RWJ Barnabas Health.” This combination would create a system with combined annual operating revenue of $4.5 billion and 30,000 employees. The merger is expected to be completed in 2016.
The Epstein Becker Green team advising Barnabas Health includes John F. Gleason, Katherine R. Lofft, Leonard Lipsky, Patricia M. Wagner, Eileen D. Millett, Colin G. McCulloch, Amy F. Lerman, Serra J. Schlanger, Benjamin M. Zegarelli, Lindsay Borgeson, Shilpa Prem, and August Emil Huelle.
Epstein Becker Green Obtains Dismissal of Action Against Health Insurance Plan
On February 5, 2016, Epstein Becker Green litigators obtained summary judgment dismissing an Amended Complaint in its entirety on behalf of client The New York State Catholic Health Plan, Inc., d/b/a Fidelis Care New York (“Fidelis Care”), one of the largest government programs-based health insurance plans in New York State. The case was brought by Ahmed Elkoulily, M.D., P.C., a medical provider, challenging Fidelis Care’s decision to terminate the provider’s health services contract on the basis of a finding that the provider presented a danger of imminent harm to patient care.
After extensive discovery, the New York State Supreme Court (Nassau County) reviewed the submissions of the parties and found that “Fidelis made a searching inquiry of a sample of Dr. Elkoulily’s files, and that its conclusion to terminate him was far from arbitrary,” the standard of review for a determination under New York Public Health Law § 4406-d. On an earlier motion to dismiss, the court had dismissed the provider’s three other claims for breach of contract, intentional infliction of economic harm, and violation of New York Public Health Law § 230(11)(b).
This case is one of the few reported decisions in which a health plan has invoked the right to terminate a provider’s contract without a hearing. The court’s two decisions on the subject present a sound analysis of the proper use of such extreme measures.
The Epstein Becker Green litigators representing Fidelis Care included Peter L. Altieri and Jennifer M. Horowitz.
Epstein Becker Green Successfully Represents a Home Health Care Agency in the Termination of a Medicaid Payment Suspension
On May 21, 2014, Epstein Becker Green, on behalf of a home health care agency client, successfully negotiated a settlement agreement with the D.C. Department of Health Care Finance (“DHCF”), ending the suspension of Medicaid payments due to the client.
The client participates in the District of Columbia’s Medicaid program and provides personal care aide services to residents of the District. In March 2014, the DHCF issued a Notice of Temporary Suspension under 42 C.F.R. 455.23, indicating that, based on credible allegations of fraud, the agency would immediately suspend payments due to the client for providing personal care aide services.
The client, with the assistance of Epstein Becker Green, settled the matter within two months of the Notice of Suspension.
The Epstein Becker Green team was led by Clifford E. Barnes and included Jonah D. Retzinger.
Assisting in Launch of Mental Health App
Epstein Becker Green assisted iExhale in the launch of an application to promote mental health and happiness. The app allows users to speak with a board-certified therapist instantly via in-app messaging or by phone. Additionally, users have access to a social network to create a greater support system. iExhale has developed partnerships with after-school programs and youth centers in order to deliver mental health services to teenagers who may have restricted access to such services. The app launched on June 6, 2016.
EBG Advisors will continue to assist iExhale in the app’s security management.
The Epstein Becker Green team included Adam C. Solander, Robert J. Hudock, Kevin J. Ryan, Amy F. Lerman, and Daniel G. Gottlieb.
Advising Health System on Forming First-of-Its-Kind Direct-to-Employer Health Care Network and Alliance in California
Epstein Becker Green provided health care transactional and regulatory advice to MemorialCare Health System (“MemorialCare”) pertaining to structuring and developing a five-year arrangement involving a direct contract to provide medical care to Southern California employees of The Boeing Company (“Boeing”) and their families (approximately 37,000 people). The arrangement has been described as the first such customized health plan option in California between a large employer and a health care provider.
The network with MemorialCare for Boeing’s employees includes 2,400 primary care doctors and specialists, nine hospitals, and 71 community-based ambulatory surgery, medical imaging, urgent care, and dialysis centers, among others. The hospitals involved include MemorialCare’s five hospitals that span parts of Los Angeles and Orange Counties in addition to hospitals, physicians, and other facilities through MemorialCare’s related network contracts with UC Irvine Medical Center, Torrance Memorial Medical Center, PIH Health Hospital-Whittier, PIH Health Hospital-Downey, and PIH Health Physicians.
The arrangement is designed to improve health, enhance patient experience, and make health care more affordable for Boeing and those employees who choose it. Also, the arrangement allows MemorialCare direct access to clinical data to better customize and coordinate employees’ health needs.
The Epstein Becker Green team included Leonard Lipsky and Patricia M. Wagner.
Epstein Becker Green Wins Dismissal of Discrimination and Retaliation Suit Against New York City Hospital
Epstein Becker Green achieved a significant victory on behalf of Staten Island University Hospital ("Hospital"), its CEO, and the Chairman of its Pathology Department in a long-running discrimination and retaliation lawsuit. Having previously obtained dismissal of the plaintiff’s federal and New York State law claims, on March 31, 2016, Epstein Becker Green obtained summary judgment on the plaintiff’s New York City Human Rights Law claims.
The plaintiff, Dr. Jotica Talwar, was a pathologist at the Hospital. Born in India, Dr. Talwar was authorized to work in the United States pursuant to an O-1 visa but was only eligible for a limited medical license under the New York Education Law. To obtain an unlimited license in New York, a physician must be a permanent resident or citizen of the United States. After practicing medicine at the Hospital for many years on a limited medical license, Dr. Talwar failed to obtain an unlimited medical license by a deadline set by the Hospital and was discharged as a result. Dr. Talwar filed suit against the defendants, alleging alienage and national origin discrimination under Section 1981, Title VII of the Civil Rights Act of 1964 (“Title VII”), and state and city law; sex-based salary discrimination under the Equal Pay Act as well as Title VII and state and city law; and retaliation under Title VII and state and city law for complaining about salary discrimination.
Two years ago, Chief Judge Carol Bagley Amon of the U.S. District Court for the Eastern District of New York granted summary judgment on the federal claims and dismissed the state and city law claims for lack of supplemental jurisdiction. On May 6, 2015, the U.S. Court of Appeals for the Second Circuit affirmed in favor of the defendants on all federal and state law claims, but, finding no dispute that diversity jurisdiction existed, held that the District Court should have addressed the New York City Human Rights Law claims separately under its more liberally construed standards, and remanded those claims to the District Court. Chief Judge Amon then granted summary judgment on the city law claims.
Epstein Becker Green attorney John F. Fullerton III represented the defendants.
EBG Shuts Down Cybersquatter, Protects Trademarks with TRO and, Later, Judgment
Epstein Becker Green’s civil action on behalf of a medical school client led to a temporary restraining order (TRO) and, later, a preliminary injunction issued against a disgruntled former student. That former student set up websites with infringing domain names that would emerge in standard Internet search engines and divert those seeking actual client websites to land on the former student’s webpages filled with vitriolic anti-client rhetoric; statements disparaging the client, its educational services and its officers; and factually false information concerning the client, its graduation rates, and certain financial matters.
The facts and legal arguments developed by Epstein Becker Green led to the court enjoining such conduct and disabling the websites, which occurred in less than 12 hours from the issuance of the first order. The court found a likelihood of success on the merits on the contract claims, trademark infringement claims, and cybersquatting claims, concluding that the client had demonstrated defendant’s “bad faith” under Title 15 of the United States Code and rejecting the former student’s claims of non-commercial speech entitled to protection.
In early 2014, federal Judge Anne E. Thompson, sitting in New Jersey, found that the rogue former student had breached his non-disparagement obligations under a prior settlement agreement and had wrongfully infringed upon our client’s trademark rights in violation of the federal Anticybersquatting Act. Judge Thompson permanently enjoined defendant and all those acting in concert with him, including all Internet registrars and hosting entities, from publishing or disseminating any statements intended to disparage the medical school and its administrators.
The Epstein Becker Green team included attorneys James P. Flynn and Robert M. Travisano of the Newark office.
EBG Litigators Defeat Preliminary Injunction Application, Substantially Narrow Discovery, and Ultimately Prevail
Longtime client Magellan Health Services Inc. (“Magellan”) has, once again, looked to Epstein Becker Green litigators for assistance—this time, in an attempt to deflect a significant challenge to a subsidiary’s credentialing program for the reimbursement of diagnostic imaging services.
In an action filed in New Jersey state court against Magellan and its subsidiary, National Imaging Associates, the New Jersey Podiatric Society asserted claims for violations of New Jersey’s unfair insurance claims practices act and unlawful discrimination against the podiatrists in violation of New Jersey’s scope of practice statute. The society also sought preliminary injunctive relief, posing a direct threat to our client’s business operations. If granted, the injunction would have restricted Magellan’s ability during the pendency of the litigation to dictate the necessary qualifications for network providers seeking reimbursement for diagnostic imaging services.
The court denied plaintiff’s application for a preliminary injunction and adopted Epstein Becker Green’s position that plaintiff’s discovery demands should be scaled back substantially. The court ordered discovery to be completed within 60 days and directed that discovery be limited solely to confirming facts that had been already presented by affidavit. After such discovery, on September 19, 2014, the court granted summary judgment in Magellan’s favor.
The litigation team consisted of James P. Flynn and Amy E. Hatcher of the Newark office.
Epstein Becker Green Represents Health Insurer in Sale of Its Nonmedical Home Care and Private Duty Services Subsidiary
Epstein Becker Green represented Fallon Health in connection with the sale of its subsidiary, Home Staff, to Associated Home Care, an affiliate of Amedisys, for an undisclosed amount. Home Staff provides nonmedical home care and private duty services through home health aides who do not hold professional licenses. Amedisys, one of the nation’s leading home health care and hospice companies, is looking to the Home Staff acquisition to enhance Amedisys’s presence and staffing capabilities in the Massachusetts area.
Epstein Becker Green advised Fallon Health over a fairly lengthy period—stretching from the auction process to closing—on a wide ranges of issues, including the definitive purchase agreement, governance matters, and the execution of the closing itself.
The Epstein Becker Green transaction team consisted of Mark Mosby, Kathy Lofft, Carly Hoinacki, John Barry, Lindsay Borgeson, Michelle Capezza, Jeff Kramer, Cassandra Labbees, Marc Mandelman, Conor Murphy, Steve Ruskin, Susan Gross Sholinsky, Trish Wagner, Pat Wheeler, and Ali Wolf. The Epstein Becker Green investigation team consisted of George Breen, Stuart Gerson, Jon Hoerner, Tom Hutchinson, and Theresa Thompson.
Epstein Becker Green Represents Perfusion, IONM, and Surgical Services Provider in Acquisition of Perfusion Services Company
Epstein Becker Green represented SpecialtyCare, a leading provider of outsourced perfusion, intraoperative neuromonitoring (IONM), and surgical services, in its acquisition of Trident Health, a highly regarded perfusion services company, for a cash purchase price in excess of $5 million. SpecialtyCare announced that, as a result of the acquisition, its perfusion division “now supports over 120,000 annual open heart and perfusion-related procedures for 850 surgeons at more than 350 hospitals, extending the company’s market leading position as the largest and most comprehensive provider of cardiovascular perfusion and perfusion-related services” in the United States.
Epstein Becker Green assisted SpecialtyCare on a range of matters relating to the transaction, including SpecialtyCare’s legal diligence review encompassing corporate organizational matters, non-customer-related contracts (including leases), employment and employee benefit matters, privacy and security related matters, and tax matters. Epstein Becker Green also assisted in negotiating the definitive agreement and other ancillary agreements relating to the transaction.
The Epstein Becker Green team consisted of Kathy Lofft, Carly Hoinacki, David Matyas, Michelle Capezza, Brandon Ge, Jeff Kramer, Cassandra Labbees, Sharon Lippett, Lenny Lipsky, Nancy Moore, Elena Quattrone, Adam Solander, Theresa Thompson, and Pat Wheeler.
Epstein Becker Green Closes Sale of PPO to Integrated Benefits Solutions Company
Epstein Becker Green advised Virginia Health Network, Inc. (“VHN”), a wholesale model preferred provider organization (“PPO”) owned by a consortium of hospitals in the Richmond and Hampton Roads areas of Virginia, in connection with the sale of all the stock of VHN to MedCost, LLC (“MedCost”), an integrated benefits solutions company operating in North Carolina, South Carolina, and Virginia. MedCost offers customized programs to help employers lower their health plan costs and provide affordable benefits for their employees. The transaction closed on May 31, 2017.
The Epstein Becker Green team included Lee Calligaro and Leonard Lipsky.
Epstein Becker Green Advises on First-Ever Affiliation Between Hospital Systems in Philadelphia and New Jersey
Epstein Becker Green advised Kennedy Health System, an integrated health care delivery system serving the residents of Camden, Burlington, and Gloucester counties in southern New Jersey, in connection with an affiliation transaction with Thomas Jefferson University (branded as “Jefferson Health”), a regional health system that recently also acquired Abington Health System, Aria Health, and Philadelphia University. This partnership builds on Jefferson Health’s innovative “hub and hub” model, whereby Kennedy Health will serve as the southern New Jersey hub of Jefferson Health. The affiliation, which took almost two years to complete, will bring enhanced clinical services to South Jersey residents, who will not only be able to receive care from the same trusted physicians, nurses, and staff, but also have access to advanced clinical services and promising clinical trials available at Jefferson Health.
This affiliation marks the first time that a Philadelphia and New Jersey hospital system joined together. Officials said that they hope the affiliation will bring better, more convenient health care services to patients in both areas.
The Epstein Becker Green team included Anjana Patel, Gary Herschman, Laurajane Kastner, Patricia Wagner, Victoria Sheridan, Diana Fratto, James Flynn, Sheila Woolson, and Andrew Kaplan.
Expanding a Cancer Network’s Reach
With the increase in more integrated health systems through consolidation and alignment, Epstein Becker Green’s experience in this space has been valuable to a number of clients entering these types of agreements. For example, the firm has recently advised one of the world’s most respected cancer centers on several affiliation agreements with nonprofit health care systems. These affiliations involve establishing comprehensive and clinically integrated cancer care programs that provide adult cancer patients served by these nonprofit health care systems with increased access to the most advanced oncology care available.
Upholding Procedures That Limit the Dispensing of Opioids
While the tragic consequences of the opioid epidemic continue to make headlines, and manufacturers and retailers face lawsuits for distributing these potent and addictive painkillers, Epstein Becker Green recently defended a retailer that stood its ground by refusing to fill an opioid prescription.
In November 2016, the Office of Civil Rights (OCR) of the Department of Health and Human Services commenced an investigation of a drugstore chain client under Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1975, and Section 1557 of the Affordable Care Act. The investigation was conducted in response to a customer complaint of age and race discrimination against our client due to its decision to decline to fill an opioid prescription issued by an out-of-state physician. At issue was the validity of our client’s procedures for validating and dispensing controlled substances. After the investigation, in May 2017, OCR concluded that our client acted consistently with its procedures and did not discriminate against the patient. Accordingly, OCR declined to issue a complaint against our client, and the proceedings concluded.
The OCR decision validated the use of our client’s procedures in all of its pharmacies for filling opioid prescriptions. These procedures comply with federal and state law relating to dispensing controlled substances without violating laws prohibiting places of public accommodation from discriminating against customers with disabilities or due to race, gender, or age. OCR’s decision not to issue a complaint eliminated a threat of the application for an injunction that would have affected all of our client’s stores.
The Epstein Becker Green team was led by Patrick G. Brady.
Learn more about our Retail industry service team.
Facilitating Health Care Investments
During the past decade, private equity firms have been heavily investing in the health care industry. Deal opportunities in health care continue to abound, and they’re driving investor interest and fierce competition.
With its robust health care M&A practice, Epstein Becker Green has extensive experience with health care mergers and acquisitions and other complex business transactions. We advise on dozens of health care deals every year, including working with venture capital and private equity funds on health-related targets.
To date, Epstein Becker Green has worked with more than 100 private equity clients on their health care investments. A few of the 2017 transactions handled by Epstein Becker Green in this space include the following:
- We provided health regulatory due diligence advice and counsel to our client, a provider of technology-driven solutions across the health care delivery system, in its acquisition of a vendor of business process outsourcing services for government-financed health plans. The combination of capabilities resulting from this acquisition will significantly enhance our client’s business process platforms.
- We gave health regulatory due diligence advice and counsel to our client, an integrated Medicare Advantage health plan and health care delivery network, in its sale to a major health benefits company.
- We represented our client, a medical benefits management company that seeks to contain health care costs and identify opportunities to improve the quality of care, in its sale to a major pharmacy benefits manager. This deal would help the combined company manage medical spending while delivering quality outcomes.
- We provided health regulatory due diligence advice and counsel to a global investment firm in connection with the merger of two large pediatric-focused home health care providers. The merged company, which will be an even larger provider of pediatric home health care services, will be part owned by our client.
- We provided advice regarding a global investment firm’s financial support of a publicly traded chain of outpatient surgery centers during the acquisition of one of the chain’s smaller competitors.
Reducing the Cost of Hospital Care
At a time of continued employer, insurance, and governmental market evolution and uncertainty, health systems face myriad challenges, as well as opportunities. Many are finding that a larger scale is required in order to meet the access, affordability, and quality needs of a growing consumer population, as well as the investment required to support those needs.
Epstein Becker Green has been using its deep understanding of the rapidly changing health care industry to assist clients as they navigate those crucial challenges and opportunities. For example, the firm recently provided structuring and governance advice, assisted with a due diligence review, and supplied antitrust analysis and tax support in a transaction involving the combination of two hospital systems. Epstein Becker Green was also integrally involved in drafting the principal transaction documents and in helping the clients satisfy key regulatory requirements.
As a result of this combination, the parties are taking advantage of their strengths and proven track record in clinical integration and population health to reduce health care costs while delivering high-quality and high-value care to the residents they serve.
Maximizing Opportunities for Behavioral Health Clients
Behavioral health providers face an ever-changing legal, regulatory, and technological environment, as well as an increasing demand for “telemental health services” (i.e., behavioral health services delivered via interactive audio or video, computer programs, or mobile applications). Epstein Becker Green behavioral health lawyers (utilizing their deep knowledge of the reimbursement, compliance, and other legal and regulatory issues, and software and remote monitoring applications, applicable to the behavioral/telemental health context) help clients minimize risks and maximize opportunities.
In 2017 alone, our behavioral health lawyers:
- Represented numerous clients on cutting-edge behavioral health matters, such as private-equity acquisitions of substance use disorder and eating disorder treatment centers located in several states
- Served as corporate, regulatory, and contract counsel to a national telemental health company in various matters
- Drafted and negotiated managed care agreements for numerous behavioral health providers and health systems
- Provided advice and counsel on:
- state-specific requirements related to crisis management in telemental health services
- the development of applicable crisis management protocols
- the structure of management and other arrangements with behavioral health practices in compliance with applicable state corporate practice of medicine restrictions
Defending Against Consumer Class Action Liability
Businesses nationwide have been plagued by litigation under the Telephone Consumer Protection Act (TCPA), a law meant to protect consumers from unsolicited auto-dialed and prerecorded phone calls, text messages, and faxed advertisements. When the damages—$500 (for negligent violations) or $1,500 (for willful violations) for each unlawful call, text, or fax—are aggregated in a class action lawsuit, a business could face massive financial exposure. As the U.S. Chamber of Commerce warned in 2017, TCPA cases “sprawl across the country, targeting companies in virtually every industry.”
Epstein Becker Green has experience helping our clients avoid liability under the TCPA. For example, the firm recently represented a health care client in a potential TCPA class action brought by a plaintiff who received a text message from our client encouraging him to make an appointment for a preventive treatment. After a lower court sided with our client, the plaintiff appealed. Epstein Becker Green argued—and the appellate court agreed—that the plaintiff provided express consent when he gave his contact information to our client during the registration process, and the client’s text message fell within the scope of that express consent. With the case now dismissed, our client can continue to assure the health of its patients and the public by transmitting phone and text messages to patients who voluntarily provide their phone numbers so that they can receive vital treatment messages.
Defeating PAGA Claims in Wage-Hour Litigation
California law provides for a unique mechanism by which employees can file suit on behalf of other employees without bringing claims as class actions—the Private Attorneys General Act (“PAGA”). PAGA generally allows an employee to sue an employer on behalf of all “aggrieved employees” for alleged violations of the California Labor Code.
The potential recovery in a PAGA claim can be staggering. Each “aggrieved employee” can recover up to $100 for the first pay period in which a violation occurs, and up to $200 for each subsequent pay period in which a violation occurs. Moreover, PAGA provides for the recovery of costs and attorney’s fees. While the limitations period is only one year, it continues throughout the course of the litigation.
Epstein Becker Green has experience aggressively and successfully defending employers facing PAGA claims. For example, our California attorneys recently achieved a significant victory for a medical transportation client that was scheduled to commence a lengthy trial in a 6,000+ person wage-hour action under PAGA with substantial potential exposure. In this PAGA case, the plaintiff contends that our client does not provide emergency medical technicians and paramedics with compliant meal and rest periods.
The defense of this case was complicated by a recent California Supreme Court decision holding that it is unlawful for an employer to require employees to remain on-call and to carry communications devices with them when they are on breaks. Nevertheless, Epstein Becker Green convinced the trial court to grant our client’s motion to strike the PAGA claims on the grounds that the trial would be unmanageable because of the need to address individualized issues. Accordingly, unless the plaintiff appeals, rather than a lengthy trial involving thousands of employees and substantial potential exposure, our client will be trying a single-plaintiff case with limited exposure.
Beating Class Certification in Wage and Hour Case
Wage and hour class actions continue to be filed against employers in great numbers, with the potential exposure in those cases often enormous. A company’s first and often best opportunity to successfully defend a class action is to defeat certification of the proposed class.
Through thoughtful and comprehensive pre-certification discovery and investigation, along with the development of inventive, case-specific strategies, Epstein Becker Green has successfully opposed class certification for many clients. For example, in November 2018, we defeated certification in a wage and hour class action brought in California against an ambulance industry client. Following a 2016 California Supreme Court decision that held that security guards did not receive compliant rest periods where they had to carry communications devices with them during rest periods, two emergency medical technicians (“EMTs”) working for our client’s subsidiary filed a putative class action alleging that they and approximately 3,300 other California EMTs and paramedics have never received compliant rest periods for the same reason.
In response to the plaintiffs’ motion for class certification, Epstein Becker Green developed creative arguments against certification. A California superior court agreed with our arguments and denied class certification. Accordingly, unless the court’s decision is overturned on appeal, rather than a lengthy trial involving thousands of employees and substantial potential exposure, our client will be trying a two-plaintiff case with limited potential recovery.
Obtaining for a Health Care Provider a Waiver of Successor Liability and the Suspension of Its Obligations Under a Corporate Integrity Agreement
During the fourth quarter of 2018, attorneys at Epstein Becker Green successfully represented a client, which provides specialized inpatient stabilization and withdrawal management services, in two matters. First, Epstein Becker Green attorneys secured from the U.S. Department of Health and Human Services’ Office of Inspector General a waiver of successor liability under the client’s Corporate Integrity Agreement (“CIA”) in connection with the acquisition of its assets by a national provider of behavioral health services. Second, Epstein Becker Green attorneys secured the suspension of the client's obligations under its CIA.
The Epstein Becker Green team was led by Clifford E. Barnes with the assistance of Anjali N.C. Downs.
Achieving Appellate Victories for Insurer in Wage-Hour Class Action
A company’s first and often best opportunity to successfully defend a wage-hour class action is to defeat certification of the proposed class. Epstein Becker Green has successfully opposed class certification in many wage-hour actions. For example, on behalf of a national insurance company, Epstein Becker Green defeated class certification in a decision that withstood two appellate challenges within the past year.
As we reported, a Los Angeles Superior Court denied class certification on claims that the plaintiffs, property inspectors working for the national insurance company, had been misclassified as independent contractors, denied meal and rest periods, and provided inaccurate wage statements, among other things. This case was unusual in that the plaintiffs proposed trying the class action in a day or two through a single witness—their expert, who would testify about what he was told in an anonymous, non-random survey. Epstein Becker Green’s client and the other defendants would never be allowed to cross-examine a single putative class member at trial, let alone know who had participated in the survey. Also, there would be no repercussions if a class member lied or exaggerated as a result. Ironically, the plaintiff’s expert testified that putative class members could be expected to remember the lengths of breaks they took 10 years ago—but the expert couldn’t remember how long his own breaks were during his deposition for the case!
The plaintiffs appealed the trial court’s decision, but in late 2018, a California court of appeal affirmed the trial court’s denial of class certification. (The appellate decision tackled a number of issues that had not previously been addressed by the courts of appeal, including the standards for using surveys to establish liability in class actions.) The court of appeal adopted many of Epstein Becker Green’s arguments wholesale in its decision. The plaintiffs/appellants then petitioned the court of appeal for a rehearing, which was granted. However, after the rehearing, in July 2019, the court of appeal again sided with Epstein Becker Green’s position and upheld the denial of class certification.
The Epstein Becker Green team included Michael S. Kun and Kevin Sullivan.
Defeating a Race, National Origin Discrimination Claim Against a Drugstore Chain Client
Epstein Becker Green achieved a victory for a drugstore chain client against a claim that the client engaged in race or national origin discrimination against one of its customers.
The matter began on November 29, 2017, when a Cuban customer (“Complainant”) went to one of our client’s stores to pick up his prescription for a three-month supply of medication that he needed for travel to Cuba. He claimed that he was told that his prescription was not ready and was asked where he was travelling. The Complainant alleged that he tried to pick up the prescription on December 4, 2017, but it was still not ready. He also alleged that he was informed that his prescription was ready for pickup on December 6, 2017, which was too late for him to catch his flight.
On December 11, 2017, the Office of Civil Rights (“OCR”) of the Department of Health and Human Services commenced an investigation of our client under Title VI of the Civil Rights Act of 1964 and Section 1557 of the Affordable Care Act, both of which prohibit discrimination on the basis of race or national origin. The investigation was conducted in response to the Complainant’s complaint, which alleged that our client engaged in unlawful discrimination based on race or national origin when our client failed to fill the Complainant’s prescription.
Epstein Becker Green assisted our client in challenging the complaint. We submitted evidence that the Complainant’s prescription was ready for pickup on November 29, 2017, and that he received notification texts that his prescription was ready for pickup on December 1, 4, 5, 6, 7, 11, and 13, 2017.
On December 19, 2018, OCR issued a letter opinion rejecting the Complainant’s allegations and holding that there was insufficient evidence to substantiate the Complainant’s allegation that our client discriminated against him on the basis of his race or national origin. Accordingly, OCR closed the complaint.
The Epstein Becker Green team was led byPatrick G. Brady.
Providing General Counsel Services to a Health System That Lacks In-House Counsel
A company’s in-house legal department faces numerous challenges, including often being overtaxed or stretched to capacity on numerous projects or obstacles, facing complex regulatory requirements and environments that may be beyond their level of experience/expertise, and having to adapt to new terrain while still fulfilling its daily responsibilities. Epstein Becker Green’s team of attorneys—utilizing real-world experience serving as General Counsel, or in senior legal and operational positions, at Fortune 500 companies, health care systems, health insurers, pharmaceutical companies, and global financial companies, among others—provides outside general counsel services to supplement the capacity of an in-house legal department and serves as General Counsel to businesses without in-house counsel capabilities. Often, health care providers find it more efficient to engage outside counsel for all of its legal services.
For example, Member of the Firm Arthur J. Fried, who, before joining Epstein Becker Green, served as General Counsel and Senior Vice President at a teaching hospital and as General Counsel at several government agencies, essentially plays the General Counsel role for a health system that serves hundreds of thousands of residents in a highly diverse community in New York City (“Health System”) that lacks in-house counsel. The Health System’s two campuses are Joint Commission accredited, with residency programs and outpatient practices holding the highest level of certification for a Patient-Centered Medical Home offered by the National Center for Quality Assurance. The Health System also contains a nursing home, a Federally Qualified Health Center, and numerous outpatient clinics. The clinics handle more than one million visits annually, and the Health System operates an Emergency Department that manages nearly 140,000 visits each year. Mr. Fried interacts regularly with, and receives an extensive array of matters from, the members of the Health System’s senior administrative and clinical leadership teams; these matters are assigned to experienced attorneys at the firm, as appropriate. Mr. Fried manages all of the legal work, acts as an advisor/member of various Health System committees, and makes reports to the Board, as appropriate.
Assisting in the Creation of a New Health Care Delivery and Payment Model
The New York State Department of Health, the New York State Office of Mental Health, and the New York State Office of Alcoholism and Substance Abuse Services have collaborated to support networks of behavioral health care providers in the move to “value-based payment arrangements,” which are a financial incentive framework that rewards health care providers for improved quality, outcomes, and reduced costs. Epstein Becker Green has been providing advice to clients in the health care industry, including in behavioral health, as they experiment with these new health care delivery and payment models.
For example, a nascent network of a dozen behavioral and medical health care providers (also known as a “Behavioral Health Care Collaborative” or “BHCC”) in New York that received a BHCC grant from the above state agencies turned to Epstein Becker Green attorneys in achieving its objectives. Member of the Firm Arthur J. Fried advises the BHCC in legally compliant ways to organize a shared infrastructure and integrated care delivery model in order to improve health outcomes, manage costs, and participate in cutting-edge value-based payment arrangements.
Our attorneys provide strategic advice and oversee all legal services necessary to establish and operationalize the new organization, including establishing its governance and committee structure, membership rights and responsibilities, policies and procedures, compliance activities, funds flow, IT and data management, privacy and security, managed care agreements, and payment methodologies.
Providing the infrastructure for and guidance to the BHCC to succeed as the health care industry experiments with new health care delivery and payment models depended on the Epstein Becker Green team’s skill in navigating uncharted waters. We are pleased to be playing a role in helping our client forge the system of the future—one that integrates care to provide better outcomes for a wider range of constituents at a lower cost.
The Epstein Becker Green team is led by Arthur J. Fried and includes Joseph E. Lynch, Patricia M. Wagner, Alaap B. Shah, Alison M. Wolf, Kevin J. Malone, Elena M. Quattrone, and Gregory R. Mitchell.
Formulating Financing Schemes to Achieve Innovative Improvements in Community Health
Historically, the health care financing system has ignored the impact of what are currently called “social determinants of health” on health outcomes and health care costs in the United States. Now, forward-looking states, such as New York, are urging health care payors, particularly those serving low-income populations, to incorporate community-based social services organizations into their networks. Epstein Becker Green has experience providing comprehensive strategic and legal advice regarding how a collective of organizations traditionally outside the health care system can avail itself of health care (insurance) and other available funds in a legally compliant and effective manner.
For example, our firm is currently representing a diverse group of community-based organizations (“CBOs”) in New York State coalescing to address the social determinants of health care through capacity building and collective action. Using a novel “pathways hub” model, Epstein Becker Green’s client is raising funds and organizing CBOs to design and implement a model for improving community health by identifying the need for, and targeting delivery of, social services that have proven to have a significant impact on health outcomes and can result in dramatic reductions in health care costs.
The Epstein Becker Green team is providing strategic advice and the legal services necessary to establish and operationalize the CBOs’ new collective organizational structure. Specifically, we provide advice and services relating to the CBOs’ corporate, governance, and committee structure, membership rights and responsibilities, policies and procedures, compliance activities, funds flow, IT and data management, privacy and security, managed care agreements, and payment methodologies. Successful navigation of the complex health care regulatory environment is, of course, essential to the client’s ability to achieve its mission.
Epstein Becker Green is also working with the designers of the “pathways hub” model on how the initiative should be organized in other states around the United States. Epstein Becker Green and its clients are trailblazing here—adapting health care organizational structures and devising novel financing schemes to hopefully achieve groundbreaking improvements in community health.
The Epstein Becker Green team is led by Arthur J. Fried and includes Alison M. Wolf and Jonathan Salm.
Securing Double Bonus for Star Ratings for Health Plan in Puerto Rico
Epstein Becker Green (EBG) achieved a victory for a long-time health plan client, Medical Card Systems (MCS) of Puerto Rico, in the Announcement of 2018 Medicare Advantage Rates and Final Call Letter. Under the Affordable Care Act, Centers for Medicare & Medicaid Services (CMS) payments to Medicare Advantage (MA) plans would be adjusted based on the MA plan contract’s quality score under the Star Rating System. Bonuses were to be awarded for contracts receiving four or more stars, increasing the plan reimbursement benchmark payment by 5 percent. Congress additionally added a provision to grant a double bonus to plans achieving four stars or more in counties with high population, high MA penetration, and low Medicare fee-for-service costs. For several years, CMS took the position that otherwise eligible counties in Puerto Rico were ineligible for the double bonus provision. In 2016, a separate Puerto Rico health plan offered comments to the annual MA Rate Advanced Notice and Draft Call Letter, suggesting to CMS that MA plans serving otherwise eligible counties in Puerto Rico should receive the double bonus. CMS declined to act upon these comments, stating that it lacked the statutory authority to make the requested change.
In 2017, EBG assisted MCS in making its own arguments to CMS on this issue. Working closely with the client’s executives, EBG conducted the programmatic research and statutory and regulatory analysis to clearly demonstrate to CMS that (i) MA plans serving Puerto Rico counties were eligible under the statute for the double bonus provision and (ii) a significant number of Puerto Rico counties satisfied the specific criteria. EBG’s analysis was submitted by the client to CMS in response to the annual MA Rate Advanced Notice and Draft Call Letter. The client shared EBG’s analysis with another Puerto Rico health plan to be submitted to CMS as well.
In the April 3, 2017, Announcement of 2018 Medicare Advantage Rates and Final Call Letter, CMS announced that it was changing its interpretation of the double bonus provision to include all Puerto Rico counties if they satisfy the enumerated criteria. CMS stated that it “appreciated” the “detailed analysis” drafted by EBG and used by CMS in reaching its decision. This CMS policy change, directly attributable to EBG performance, increased MA reimbursements to the client by 4%-5%, representing tens of millions of dollars in revenue impact in 2018. Total reimbursement to all MA plans in Puerto Rico was estimated to increase by nearly 3 percent, in 2018. The EBG team on this issue included Philo D. Hall, Thomas E. Hutchinson, and Kevin J. Malone.
This victory demonstrates the value of EBG’s distinctive multi-perspective approach combining (i) historical knowledge of the MA program from both the CMS and plan perspective and (ii) familiarity with the Puerto Rico heath care system and its distinctive demographic factors, with a thorough regulatory and statutory analysis.