Busy Health Insurance Legal Sector Could Get Busier

"You just took a $3 trillion health care industry and you just shook it up, so there is going to be a lot of changes," Coleman has said. "There is a lot of unknown and uncertainty and we are going to help our clients figure this all out."

The Regulatory Climate

The American Health Care Act bill, a major Republican vehicle for attacking the Affordable Care Act, was announced March 6. On March 24, as the health care industry was starting to digest the bill, the bill was withdrawn. Republican leaders said they lacked the votes to move the bill through the U.S. House of Representatives.

K Royal, vice-chair of the Association of Corporate Counsel's health law committee, spoke with The American Lawyer in advance of that withdrawal, and her comments turned out to be right on target. Royal said the arguably controversial provisions of the plan — such as a proposal to increase the premiums of people who let their insurance lapse by 30% — might delay passage of the bill by a year or longer. And then there was the issue of how much the plan would cost, which had not been specified.

"Someone needs to put in there how they're going to pay for it," Royal, a former privacy counsel at San Jose, California-based Align Technology Inc, said. "People complain about having high deductibles now, but, under this, they're going to have to pay for everything, and I don't see where this plan can fix that at all."

Health care attorneys also are keeping a close eye on additional rulemaking in 2017 associated with the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, which imposes substantial changes on how Medicare pays for physician services. Under the law, Medicare is supposed to reward doctors for providing more efficient, higher quality care, rather than simply paying them a fee for each service provided.

"It's a game-changer that continues a policy trend toward linking payment with performance," says Eric Zimmerman, a partner at McDermott Will, who heads the firm's health industry advisory practice group.

The In-House Take

General counsel at health care companies have been in a wait-and-see mode, watching to see what the fate of the ACA will be, and what might replace it. "The uncertainty is the No. 1 topic," says Lawrence Lopardo, executive vice president and general counsel at Oregon-based Avamere Health Services, headquartered in Wilsonville, Oregon, a group of independent companies that provide skilled nursing, assisted living, therapy, home health and hospice to senior citizens in several Western states. "When there's uncertainty, you tend to not do new things," he adds.

But Lopardo and others say that the industry has a chance to have its voice heard while the health care system is under review by an administration that has vowed to reduce regulations. "We as a profession certainly see an opportunity to put forth ideas to the decision-makers in Congress and the administration about what those decreased regulations would be," Lopardo says.

Bill Dombi, vice president for law at the National Association for Home Care & Hospice in Washington, likewise cites the potential decrease in regulation as an antidote to the worries that keep him awake at night. He points to a home health regulation that could require pre-claim review for Medicare home health services, just as many commercial insurance plans now require prior authorization for certain types of care. Late last year, then-Rep. Tom Price, who is now the new secretary of Health and Human Services, introduced legislation that would halt the program.

"There is hope that the Trump administration will put a pause on this shotgun approach to regulation," Dombi says. "We don't expect with Trump and Price in office that oversight is going to go away entirely—that would be bad business—but we're hopeful we can take a more sensible approach to it."

For their part, private insurers share this excitement about the possibility of less government restriction and oversight, but they are less worried about the uncertainty, outside lawyers who represent the companies say. "They have long-term strategy plans that they think they can execute well regardless of the administration," Nelson Hardiman's Fuller says.

Amid the uncertainty, there has been movement among in-house lawyers at health care organizations. The American Medical Association announced Feb. 28 the appointment of Brian Vandenberg as senior vice president and general counsel. Vandenberg most recently served as general counsel at Livongo Health Inc., a consumer digital health company in Mountain View, California. He replaces Jon Ekdahl, who is retiring after almost 16 years with the AMA.

In the lead-up to the trials over the insurance company mergers, one health care attorney notes, there were a number of in-house attorneys who made moves or started to put their resumes out, as the future of their legal departments came into question.

— Read ACA creeps into state and local courts: 5 early cases on ThinkAdvisor.