Health Care in 2014: A Brave New World

Troutman Pepper

This article was published in the June 2014 issue of Middle Market Growth, a publication of the Association of Corporate Growth. It is reprinted here with permission.

With the completion of the enrollment phase of the Affordable Care Act (ACA), health care in the United States has entered a new era that will be characterized by extensive changes and challenges for both providers and suppliers. The convoluted landscape of federal and state regulations will become even more complex as regulators ramp up enforcement activities under Obamacare and related statutes. Audits by government agencies on all levels to squeeze health care entities and recover monies slated for expanding access to health care will increase, as will private lawsuits by whistleblowers alleging fraud and abuse.

No part of the health care world will be spared. Health care suppliers are being pressured from all sides, and physician-owned distributorships of medical devices are especially undergoing stricter scrutiny. Health care providers are being incentivized to form accountable care organizations (ACOs) that bring individual and institutional providers together to receive one bundled payment for the care of an individual patient. The long-term viability of these ACOs, and the multiple operational and financial issues they face, is uncertain.

In health care operations, privacy breaches will occur in astounding numbers, related in part to the increasing use of electronic medical records encouraged by the federal government. In addition, the proliferation of personal mobile devices in the health care workplace increases the risk for such breaches, leading many health care providers to rethink policies on “bring your own devices” (BYODs), also known as “bring your own disasters.” Complying with federal and state privacy requirements, and having an effective plan in place to deal with the avoidance, detection and minimization of privacy breaches, is paramount but costly for financially strapped health care providers.

Health care is a significant part of U.S. gross domestic product, approximately 20 percent at last calculation. The myriad legal issues impacting health care providers and suppliers are increasing exponentially. Obtaining competent legal guidance is essential for providers and suppliers if they are to survive in this increasingly complicated environment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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