Goldsand Friedberg Blog
Welcome to Goldsand Friedberg. I founded my boutique corporate and regulatory health care firm in 2019 to offer my unique skill set to clients differently than the large firms I hail from. Unbound by traditional fee structures and bureaucracy, I can deliver a customized experience to each client. And have some fun doing it. I look forward to working with you.
–Marc Goldsand, Founder
Marc Goldsand Honored
Marc Goldsand posted on March 11, 2019:
Marc Goldsand, Founder of Goldsand Friedberg, was recognized on March 9, 2019, along with his mentor and friend, Marc Auerbach, by Women of Tomorrow Mentor and Scholarship Program with the 2019 Excellence Award. WOT is an amazing organization, helping disadvantaged young women finish high school and go to college.
Selling your practice and the “Brother-in-law Effect”
Marc Goldsand posted on March 8, 2019:
When I was in “Big Law” mostly representing larger clients purchasing small(er) medical practices, an interesting phenomena emerged, which I coined as the “Brother-in-law Effect.” What I mean by this term is that the medical doctor owner of the practice often did not have an experienced corporate health care attorney to represent his or her interests in the transaction, but a “brother-in-law,” college roommate, or golfing buddy doing the deal. The Seller’s “Transaction Team” was invariably assembled out of a selling physician’s desire to save a little money. Why waste your hard-earned gains on lawyers, right? The truth is that a competent corporate health care attorney can help you in more ways than you think, including helping you close faster, and even (maybe) increase the purchase price. While there are many advantages to using an experienced corporate health care attorney, I will primarily explore three here.
The Due Diligence Process
For any selling business, the due diligence process can be invasive and burdensome. The Buyer’s professionals may want to come onto your premises, causing confusion or angst among your staff. You will be asked to locate, organize, and upload to a virtual “Data Room” hundreds – if not thousands – of documents for the Buyer’s professionals to review. You want to make sure your corporate documents are in order, that your contracts are organized, that your state filing fees are paid and current, that your Tax Returns are filed, and your practice appears on paper to be organized and well-managed, before going under contract. Getting the practice in “sale shape,” takes time and energy. I have known practice administrators (who remain tasked with actually running the practice during this process) quit over the excess workload.
We have a strategy to lessen this burden, by using our in-house operations staff – who bill at the fraction of the rate of attorneys – to come to your office and assist with this process early on. An organized practice is a marketable practice.
Representations and Warranties and Disclosure Schedules
Reps and warranties and the disclosure schedule can be the bane of an inexperienced attorney’s existence. What the reps and warranties do is two-fold. First, they require you, the owner of the Seller, to download all of your knowledge about your practice into the purchase agreement and disclose any business or regulatory issues that the Buyer should be aware of, so there are no surprises later. And if you are fulsome in the disclosures and the Buyer does close on the transaction, the Buyer will have a difficult time seeking redress against you in the future if there is an issue covered by them. Second, they place you, the recipient of all of the money in the transaction at closing, personally on the hook if issues become apparent that adversely affect the practice after closing, and which were caused during your tenure in ownership. Because of this latter issue, you really need to be careful in reviewing and negotiating the reps and warranties.
Similarly, the Disclosure Schedules, which link to the reps and warranties, generally require you to incorporate much of the documents assembled in due diligence into the purchase agreement. For example (and there are pages and pages of examples), you might be asked to represent that “Other than the matters listed in Schedule 10.1, the practice has not had a malpractice suit brought against it in the last 5 years” or perhaps, “Schedule 10.9 includes complete copies of all of the managed care contracts of the practice.” If you leave out a legal case that adversely affects the practice, or you forget a critical managed care contract that was not ultimately assigned by Buyer,” you could find yourself in a lurch.
Corporate Practice of Medicine, Earn-outs, and AHCA
While the sale of a health care business is similar in many ways to a non-health care business, there are certain specific regulatory considerations applicable to the former. For example, if you are selling to a non-physician in the State of Florida, the Buyer will likely need to obtain a health care clinic license from Florida’s Agency for Health Care Administration. The fairly rigorous application process impacts if and when a closing can occur. Another example: the way the purchase price is paid – and how it might increase or decrease based on the future success or failure of the practice – implicates the Federal Anti-kickback statute. Suffice it to say, there are many other nuances to health care transactions as well.
Give me a call
Attorneys without corporate health care experience will have great difficulty with these transactions. I have seen an overwhelmed Seller’s counsel cause a deal to take 6 months when the Buyer was ready to close (and pay the purchase price in full) in 2 months. Another deal fell apart completely. This was not a matter of stupidity or incompetence. It was a lack of experience in this area.
The bottom line: having been with a big firm for many years and having represented parties in these transaction, I understand these issues and can help you work through them. And as a small firm, I can bring great value and a personal touch. Contact me for a free consultation.
Marc Goldsand Featured on Bench and Bar Conference Speaking Panel - “Hot Topics in Health and Medical Law”
Marc Goldsand posted on March 4, 2019:
Goldsand Friedberg's Marc Goldsand spoke on the “Hot Topics in Health and Medical Law” panel on March 1, 2019, at the American Inns of Court Bench and Bar Conference in Miami. When discussing the pros and cons of managed care in the 21st century, it got a little spicy!
Online Viagra? Glossy Startups Target Millennials
Marc Goldsand posted on February 12, 2019:
You’ve probably seen or heard them. Glossy television, radio or internet ads featuring a down-to-earth, millennial-looking young man or perhaps a famous rapper. At first blush, these are just others in a growing line of Bay Area startups pitching products directly to you, the consumer. They have all of the hallmarks of other direct-to-consumer retailers. They bypass traditional marketplaces, saving you money because their products are not name brands and there’s no middleman. In fact, they look just like those commercials for the world’s most innovative suitcases, or the most perfect bed sheets or the slickest tooth brushes. But these are not vendors of every day consumer products. These are online prescription drug retailers, selling targeted products like sildenafil (generic Viagra), which gives those with—ahem—performance difficulties, assistance in that area, or maybe minoxidil, a hair growth drug.
Pay a fee, answer some online questions, submit a copy of your driver’s license and a photograph, and away you go. “These are low risk drugs,” some say, “you don’t even need a prescription for these in Europe.” Others note that startup companies like Uber and AirBNB acted in knowing violation of antiquated rules and regulations, with an eye toward fomenting public support to change those rules and regulation. As a corporate health care and regulatory attorney with substantial experience advising digital health businesses, I cringe when I hear this. Something feels inherently different between ride sharing and the broad universe of prescription drugs. Prescription drugs require a prescription for a reason.
The terms “digital health” or “telehealth” or “telemedicine” mean many things to many people. To some, the tools of technology are vehicles to diagnose faster, and further away, to treat quicker and better, to keep nonemergencies out of expensive emergency rooms, and to get actual emergencies triaged faster. High-resolution imaging, data analytics, machine-based learning, artificial intelligence and other technologies offer new solutions to old problems, or identify problems no one realized existed. This kind of digital health is the wave of the future. But to others, these tools are used for something less new and innovative: to find a market for and sell prescription drugs. For some of us practicing in this digital health world, these latter enterprises are causing concern.
The Business Model
These are not singular “companies” in the traditional sense: they are ecosystems of business entities, working together and bound by a series of contracts to provide consumers with a quick and efficient experience. The primary company owns or licenses all of the forward-facing technology and intellectual property, including the website and platform which hosts the medical consult. It contracts with one or more “friendly” professional associations or professional corporations which engage medical providers licensed to practice across the United States. It also affiliates with one or more preferred pharmacies which fulfill the orders and mail the prescriptions directly to the patients.
Broad marketing campaigns draw patients to the website, where they flow seamlessly through a brief online “medical consult.” Typically the consult includes a series of questions, the answers to which are stored and forwarded to a medical doctor for review, along with a copy of the patient’s driver’s license and a recent photograph. More often than not this results in a prescription and a confirmation that the drugs are in the mail. The entire process can be swift. Although every business is different, it is common for the drug retailers to collect the fee from the patient at the outset, even before the medical visit has occurred, then pay the medical doctor for the online consult and the pharmacy for the drugs, retaining the remainder as profit.
One troubling issue is that almost every state—including Florida—has a regulation or law that prohibits generating a prescription based solely on a “questionnaire,” a term that is almost never defined. There’s also the concept that states typically require that retailers selling prescription drugs to their residents be licensed pharmacies, rather than technology startups founded by 30 year old tech entrepreneurs (having the order “fulfilled” by a licensed pharmacy does not change the fact that the patient is buying the product directly from the online retailer, and looking to the retailer for instruction and guidance with respect to the purchased product). Mind you, not all of these businesses are the same. There are legal ways for third parties to market prescription drugs for a fee. Likewise, unlicensed persons and companies can legally perform and be compensated for performing an array of administrative services to facilitate these types of businesses. And, of course, licensed pharmacies can sell prescription drugs at retail.
The bottom line is that consumers should be aware of the risks when they buy prescription drugs for vanity or recreation and not mistake them for harmless consumer products and attorneys should caution clients about the risks inherent in operating these businesses. In this writer’s view, assuming that the rules and regulations will catch up to innovation is not a sound strategy in the health care realm.
Medicare Advantage Credentialing and Telehealth: One Less Headache
Marc Goldsand posted on January 29, 2019:
Effective January 2019, providers no longer have to enroll in Medicare to provide services Medicare Advantage patients. CMS published CMS-4182-F on April 16, 2018, which rescinds the enrollment requirement for (i) providers who prescribe drugs to patients enrolled in Medicare Part D, and (ii) network providers and suppliers that furnish health care items or services to a Medicare beneficiary who receives his or her Medicare benefit through a Medicare Advantage (MA) organization. This new rule has one caveat: the Medicare Advantage Provider must not be listed on Medicare’s new “Preclusion List,” which is a list of prescribers and individuals or entities who fall within any of the following categories:
(1) Are currently revoked from Medicare, are under an active reenrollment bar, and CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program; or
(2) Have engaged in behavior for which CMS could have revoked the prescriber, individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program. Such conduct includes, but are not limited to, felony convictions and Office of Inspector General (OIG) exclusion.
CMS published FAQs outlining the new rule in August 2018. They can be found here. This new rule is welcome news for telehealth companies, especially those with professionals licensed in multiple states. The credentialing process with regional MACs, which, among other things, requires physical addresses in the states where services were to be provided, had created enormous headaches for telehealth professionals.
#Digitalhealth #Telehealth #Telemedicine #MedicareAdvantage #Goldsandlaw