Michelman & Robinson, LLP’s (M&R’s) Health Care Department knows the ins and outs of health care, and fully comprehends the long-term business goals and concerns of the providers we serve. Our attorneys are health care authorities, providing our clients seamless advice on legal and business issues. 

Whether dealing with a national provider, an assisted living facility, an ambulatory surgery center or an emergency transportation company, we apply our intimate knowledge of health care to provide industry-focused expertise that caters to our clients’ needs. Our attorneys have an exemplary track record handling the full spectrum of complex health care litigation. We routinely counsel clients through shareholder disputes, billing and reimbursement issues, management company disputes, coding issues, and fraud and abuse. We also frequently provide counsel regarding the intricacies and nuances of the Affordable Care Act to our clients, particularly on issues relating to reimbursement.

M&R attorneys have successfully litigated many high-profile cases before state and federal courts, and regularly handle major class actions, having recovered tens of millions of dollars on behalf of providers. We are especially adept in the emergency provider arena, counseling and litigating on behalf of emergency physicians, ambulance companies and urgent care facilities. 

We have expertise dealing with the most difficult transactions in addition to regulatory and day-to-day business matters. Our attorneys have represented clients in highly elaborate joint ventures and mergers and acquisitions of health care facilities and hospitals. We have also provided counsel on financing, leasing, entity formation and regulatory issues involving the Stark Law, the Anti-Kickback Statute, the Anti-Markup Rule and the False Claims Act. Additionally, M&R attorneys advise physician groups on issues related to ancillary services such as laboratories and imaging centers, and a wide range of corporate, labor and employment and commercial business issues related to the health care industry.

We have decades of experience counseling on matters related to financing, lending, and purchase and sale of assisted living and skilled nursing facilities. Additionally, M&R attorneys often counsel substance abuse treatment providers with regards to reimbursement, payor audits, marketing arrangements and industry referrals. We help facility owner/operators and their laboratories develop fraud and abuse compliance programs and procedures, litigating where necessary.

As an industry-focused firm, we are actively involved with the American Health Lawyers Association, the American College of Emergency Physicians, the Urgent Care Association of America, the Emergency Department Practice Management Association, the California Society for Health Care Attorneys, and the California Ambulance Association. We are frequently featured as speakers and guest panelists at events hosted by these and other health care organizations, and regularly publish articles in top health care trade publications.

Areas Of Expertise

The following is a select sampling of our representative matters:

• Acquisition: M&R represented the JOPAL Group in the $120 million transfer of physical assets (TPA) of Workmen’s Circle MultiCare Center, a 560-bed nursing facility, to a Delaware business trust — the first time the U.S. Department of Housing and Urban Development (HUD) has granted approval for the use of a Trust as a Borrower
• Acquisition: M&R closed a leveraged buyout of a 499-bed nursing home in Manhattan (Dewitt Rehab) for $105 million, including a $90 million bridge to HUD from KeyBank. The property is located on the Upper East Side of Manhattan and has always been looked upon as the most significant site in Manhattan available for eventual redevelopment into condominiums. 

• Addiction Treatment Facility Compliance: Developed policies and procedures for substance abuse providers relating to marketing, referrals and payor relationships to ensure compliance with Federal and state regulations.

• Addiction Treatment Facility Compliance: Represented addiction treatment facility operator in $100 million federal lawsuit against several treatment centers, testing labs, and individuals, alleging financial kickbacks, fraud and other violations. M&R filed a motion to dismiss the federal claims, which was ultimately granted by the Florida court, and with no remaining jurisdiction over the plaintiff's state law claims, the case was dismissed. This represented a significant victory for our client and for the addiction treatment community.
• Commercial Lending: Represented a major manufacturer of medical devices in connection with $60 million revolving credit and term loan facilities.
• Defense of Physician in Regulatory Matter: Successfully represented a physician group in an investigation by the federal government regarding the purchase of non-FDA approved drugs from foreign sources. M&R helped develop an interpretation of the applicable licensing statutes to prove that the client was misled into purchasing the drugs from an unlicensed source, which appeared to be properly licensed by more than one state, to sell the medications at issue.
• DIP and Exit Facilities: Represented a provider of national healthcare services, as borrower, in a $250 million debtor-in-possession financing and a $515 million exit financing.
• Government Investigation: Successfully represented an emergency physician group being investigated by the Office of Inspector General for coding and billing irregularities, and other health care fraud as a result of a sealed qui tam suit filed under the False Claims Act. M&R negotiated with the Assistant U.S. Attorney to decrease the scope of the government subpoena, and retained experts to review the group’s billing and coding to corroborate the absence of fraud and abuse. We successfully defended the group, which resulted in the government choosing not to intervene in the qui tam suit, and the action being dismissed.
• Independent Physician Association Reimbursement Dispute: Represented a large group of emergency physicians in litigation against an IPA to recover payment for services at physicians’ usual and customary rates. The Independent Physician Association (IPA) wrongly withheld several hundreds of thousands of dollars refusing to pay usual and customary rates for Current Procedural Terminology (CPT) codes as billed. M&R obtained a favorable settlement on the clients’ behalf, including payment of past amounts due, and structured agreed-upon contract rates going forward.
• Mergers and Acquisitions: Led a team of lawyers in the roll up of medical service providers, including the purchase of an ambulatory service provider and an in home care provider. Negotiated the terms of sale, the purchase agreement, organized a new holding company and assisted in the negotiation for new debt and equity for the combined firm.
• Nursing Home & Rehabilitation Facility - Refinance: Counseled client in the $13 million refinance of Peninsula Nursing Home and Rehabilitation Facility in New York. This was a rather complicated matter in that a previous purchaser acquired a hospital and nursing home, broken up as two parcels, and kept the hospital while putting the nursing home, which was physically attached to the hospital, up for sale. Our client purchased the nursing home. During this process, we encountered several legal obstacles, not the least of which was an environmental issue related to construction debris and chemical traces at the nursing home site. Mr. Zafrin worked diligently with an environmental study company to revisit their report in light of new facts, thereby clearing any environmental roadblock and enabling the client to refinance.
• Provider Reimbursement:  M&R represented a pathologist who staffed a pathology department at a hospital in Portland, Oregon. The pathologist’s contract with the hospital was supposed to provide him with data so he could bill for a certain type of service. The hospital repeatedly delayed providing the data, and once it finally did, shut it off without warning due to alleged patient complaints. Shortly after M&R instituted arbitration, we mediated the case and the hospital offered a $50,000 settlement. One week before arbitration, it conceded liability but only offered $300,000. We aggressively arbitrated the case and won an award near $1.3 million with attorneys’ fees and costs.
• Provider Reimbursement: In Centinela-Freeman Emergency Medical Associates v. Health Net of California, our clients, a large medical group, staffed the emergency room at multiple hospitals. An Independent Physician Association (IPA), La Vida, sent many patients to the ER, but the IPA was struggling financially and failed to reimburse the ER doctors before going out of business. M&R sued every major HMO in California, alleging that they knew that La Vida could not pay its bills. The trial court sustained the HMOs’ demurrer to the ER doctors’ complaint without leave to amend, finding that the HMOs could delegate their responsibility to IPAs with immunity. In a unanimous published decision, the Court of Appeal reversed the trial court and held in favor of the ER doctors. Finding the HMOs’ conduct demonstrated negligence and showed a degree of “callousness,” the court ruled that negligent delegation is a viable cause of action in California. The health plans appealed to the California Supreme Court, which in November 2016, issued a ruling upholding the Court of Appeals, and sending a strong signal to health plans. The Court ruled that emergency physicians can sue HMOs for negligently delegating payment responsibility to an IPA when they knew, or should have known, that the IPA was not financially stable.
• Provider Reimbursement: In Centinela-Freeman Emergency Medical Associates, et al. v. Hispanic Physicians IPA Medical Corporation, M&R represented an emergency physician group against a managed care organization. The IPA systematically underpaid or completely denied payment for emergency services provided by our client to its members. On the eve of trial, the judge ordered the parties to participate in a mandatory settlement conference. The parties were able to settle a portion of the claims. However, in order to provide our clients with a business solution, settlement of a portion of the claims became contingent on arbitrating a case rate for all services going forward. In arbitration, each party was to propose a rate to be paid for each patient visit by any member of the IPA to any of the 10 hospitals in which our clients provide emergency services. During arbitration, the IPA proposed and argued for a case rate of $140 or 120 percent of Medicare (a set amount to be paid for every ER visit by the IPA’s members). The arbitrator, however, ruled in favor of M&R’s proposed rate of $350 per claim.
• Provider Reimbursement: Successfully represented a specialty pharmacy in litigation against a national health plan, seeking reimbursement for providing a patient with home infusion drug therapy. The health plan sent payment of over $1 million to the patient, with the intent that the patient would use the funds to pay off the specialty pharmacy for services rendered. However, the patient then refused to turn over the money, claiming that the pricing was illegal. The patient, however, did not return the payment to the insurance company and instead defended the lawsuit in an attempt to keep the payment. Our client, the specialty pharmacy, was successful in compelling the patient to turn over the payment.
• Residential Long-Term Care - HUD Refinance: M&R helped our client close on the refinance of Middletown Park Manor Rehabilitation and Health Care Center, consisting of a $23,240,000 mortgage insured by the Department of Housing and Urban Development (HUD). This matter commenced in March 2010 with the purchase of the 240-bed facility by one of our long-time clients. After two refinances and a workout of the original purchase money financing, the project finally stabilized and was able to obtain a 35 year self-amortizing HUD mortgage with no personal guarantees and, most notably, a return of a substantial portion of the client’s original equity.
• Substance Abuse Treatment Facility Compliance: Developed policies and procedures for substance abuse providers relating to marketing, referrals and payor relationships to ensure compliance with Federal and state regulations.
• Substance Abuse Treatment Litigation: Represented substance abuse treatment provider in national litigation involving alleged kickbacks from toxicology laboratory.
• Substance Abuse Treatment Administrative Hearing: Represented detoxification facility in administrative action brought by the California Department of Health Care Services seeking revocation of client’s license.
• Unfair Competition: M&R’s client, an emergency medical group, was sued as a cross-defendant in a $50 million unfair competition case between a major health plan and a large hospital system. The plaintiffs alleged that the hospital system and our client conspired to increase hospital admissions and decrease transfers based purely on financial reasons. The health plan claimed that the hospital and our client defrauded the health plan, along with members of the general population, and challenged stability determinations made by the treating physicians. M&R successfully handled litigation between the two health care titans, attending over 100 days of depositions, managing the ESI production of a million pages of documents, and working to secure a dismissal of the lawsuit. (See Prime v. Kaiser)   

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