Mergers and Affiliations

Nonprofit healthcare providers face economic challenges created by the significant market, legislative, and regulatory changes to the reimbursement and healthcare delivery systems that have occurred over the last few years.  Strategic planning for the future requires proactive organizations to confront the impact of these changes on their current business models.  As  providers face these new realities, affiliations and alliances may enable nonprofit providers to position themselves to adapt successfully to these changing delivery and reimbursement models.  We have guided numerous nonprofit clients through this process, and are well-versed in the core strategic issues which must be addressed, including, but not limited to, the following: the mission and values of the potential participants; the mission and values of the resulting affiliation or alliance; the integration of corporate cultures on management style and operations control; governance concerns of the parties to an affiliation or alliance; the timing of the affiliation or alliance; and potential stumbling blocks to the finalization of an affiliation or alliance.  We have guided clients through the various structuring options and models available for affiliations and alliances, as well as the legal concerns which may arise, including, but not limited to, the following: antitrust concerns; tax exemption considerations for your existing entity and any new entity(ies); and AKS and Stark considerations.  Because we have handled numerous affiliations between nonprofit entities, we have faced the practical, real-world considerations which must be addressed once an organization has selected the ideal structure and has decided to put an affiliation or alliance plan into action, including:  conducting thorough due diligence and identifying the hot-button issues that can either derail the affiliation/alliance at the outset, or create issues down the road after the closing; completing the necessary legal documentation; obtaining regulatory and licensing approvals; addressing financing concerns (including existing negative covenants); deciding whether or not to rebrand the affiliation or alliance; obtaining other approvals and third-party consents; keeping the project on task; resolving contingencies; and closing the affiliation or alliance.  Nonprofit providers seeking to affiliate may also require approvals from the Pennsylvania Attorney General’s Office and the local Orphan’s Court.  We have assisted our clients in navigating the legal and regulatory process applicable to affiliations, changes of ownership or control, including state licensure applications and Medicare and Medicaid certification filings.