Epstein Becker Green Assists Two Health Insurers in Defeating Data Breach Class Certification
After more than five years of litigation, on April 26, 2016, a three-judge Superior Court panel in Pennsylvania upheld the denial of a motion for certification of a class action against Epstein Becker Green clients Keystone Mercy and AmeriHealth Caritas Health Plans.
In December 2010, the plaintiff, on behalf of his daughter, filed a lawsuit against the two insurers, claiming that they violated state consumer protection laws by losing a flash drive containing the personal health information (PHI) of more than 283,000 individuals and by failing to live up to their promise to protect and safeguard these individuals’ PHI.
In denying the plaintiff’s class certification motion, the panel found that the trial court had “carefully considered the numerosity, typicality, adequacy of representation, and fair and efficient method of adjudication requirements for class certification under Rule 1702 [('Prerequisites to a Class Action')] and found the class action requirements were not met.” In addition, the panel agreed with the trial court’s ruling that the plaintiff could not properly represent potential class members because he was unable to conclusively link his daughter to the PHI contained on the lost flash drive. Also, the panel left in place the trial court’s finding that, as there was no there was no actual harm associated with the data breach, the plaintiff failed to fulfill the typicality requirements for a class action.
The Epstein Becker Green team was led by Stuart M. Gerson and included Patricia M. Wagner and Tanya Vanderbilt Cramer.
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 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 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 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 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.
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 Successfully Advises on Regulatory Issues for Mental Health Platform
Epstein Becker Green has successfully advised Ginger.io, Inc., a big data/behavioral analytics health care company based in San Francisco, on a number of regulatory issues concerning, among other things, telehealth, corporate practice of medicine, reimbursement, the Food and Drug Administration (FDA), compliance, and fraud and abuse.
Named a “2015 Technology Pioneer” by the World Economic Forum, Ginger.io is an industry leader whose mobile app analyzes passive data and analytics to identify patterns in users’ behavior and mental state that may impact their health and well-being. Providers can use the Ginger.io platform to reach out when patients need support.
Ginger.io also provides a virtual care network of mental health providers to enable users to receive virtual care therapy through the mobile app. Our team counseled Ginger.io as the company prepared to launch that virtual care network. Ginger.io has collaborations and partnerships with a number of leading hospitals, academic medical centers, and insurers.
The Epstein Becker Green team included Kevin J. Ryan, Jason E. Christ, John W. Eriksen, Helaine I. Fingold, Paul A. Gomez, Daniel G. Gottlieb, Zachary C. Jackson, Amy F. Lerman, Jennifer L. Nutter, Kim Tyrrell-Knott, and Patricia M. Wagner.
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 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.
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.