August 22, 2025 • 36 mins
Kate Taylor, Associate Principal, ECG Management Consultants, speaks with Katie Tarr, Shareholder, LBMC, Alaina Crislip, Member, Jackson Kelly PLLC, and Payal Shah, Senior Counsel, Vituity, about some of the financial and regulatory pressures (and resulting compliance breakdowns) they are seeing in the health care industry and strategies and solutions for navigating the intersection of financial constraint and regulatory compliance. They offer insights from the in-house counsel, external counsel, and consultant perspectives. From AHLA’s Women’s Leadership Council.
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Episode Transcript
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SPEAKER_00 (00:00):
This episode of AHLA's Speaking of Health Law is
brought to you by AHLA membersand donors like you.
For more information, visitAmericanHealthLaw.org.
SPEAKER_03 (00:17):
Good afternoon.
Thank you for joining us ontoday's podcast titled In-House
Counsel, External Counsel, and aConsultant Walk into a Hospital,
Navigating Financial andRegulatory Pressures.
We're hoping this titled piquedyour interest.
It's not always a bad thing whenthese three professionals are
working together on something,but it certainly can be.
That said, we have a lot ofgreat content for you today, so
(00:38):
we'll go ahead and dig in.
My name is Kate Taylor.
I'm an associate principal atECG Management Consultants.
I've been providing valuationservices for approximately 15
years, and more often than not,I am usually working alongside
external counsel or in-housecounsel for many of my clients.
Today, I'm joined by threecolleagues of mine on the
(00:59):
Women's Leadership Council ofAHLA, and you likely guessed it,
but we do have an in-housecounsel, an external counsel,
and a consultant on thispodcast.
So I'll have each of themintroduce themselves briefly.
Katie, how about you get usstarted?
SPEAKER_01 (01:12):
Happy to.
Thank you, Kate.
As Kate said, I'm the consultantof the three of us today, and
I'm happy to be here.
My name is Katie Tarr.
I'm a shareholder at LBMC basedin Nashville, Tennessee.
SPEAKER_04 (01:25):
And my name is Elena Chrislip.
I guess I'm the externalcounsel.
I am a member at Jackson KellyPLLC in their transactional and
healthcare industry group.
SPEAKER_03 (01:36):
And I'm Payal Shah.
I'm senior counsel at Vituity.
It's a physician healthcareorganization.
And I've been practicinghealthcare law in-house for many
years.
Okay.
Thank you each for introducingyourselves.
So I'm going to kick this offwith a question for all of you.
What are some of the mostpressing financial pressures
(01:58):
you've seen healthcareorganizations grapple with over
the last 12 to 18 months?
I'm sure there's a lot, but ifyou can narrow them down to just
a couple, that'd be great.
Katie, do you want this?
Yeah, go ahead.
SPEAKER_04 (02:10):
Oh, okay.
I was just going to say some ofthe financial pressures that
I've seen over the last 12 to 18months, folks...
grapple with are increased laborcosts and workforce shortages,
inadequate Medicare and Medicaidreimbursement, inflation, rising
inflation costs has been acritical one.
(02:31):
And also I think delays inreimbursement from a commercial
practice payment perspective.
SPEAKER_03 (02:40):
Yeah, I was just going to say from a provider
standpoint, we've definitelybeen seeing reduced
reimbursement from the payers.
And then the advent of the Northsurprises act and other
regulations, you know, state orfederal that have really, you
know, put some hardships on thephysician and provider industry
(03:01):
and getting payment for theirservices has been really hard
over the past few years andreally the last year or so.
SPEAKER_01 (03:12):
On my side, I've seen a couple of things.
One is what I hear come up allthe time is uncertainty and with
uncertainty of how differentpolicies or market pressures are
going to occur, how that's goingto impact finances, people kind
of tightening their belts andtrying to hold steady and think
(03:33):
about the future and plan forall of these uncertainties,
which can take a lot of time andresources.
And then in my everyday job,which is more on provider
compensation.
I'm seeing a lot of increasingsubsidies for certain
specialties.
I think two comments from mycolleagues here as
reimbursements declining forphysician services, then the
(03:54):
required subsidies from thehospital is increasing.
And then I've also seen a lot ofcompetition for physicians, for
practices in markets, somereally competitive markets and
getting some late night phonecalls from my clients when their
physicians are getting offersfrom other organizations and
needing some quick responses.
(04:15):
So those are some of the itemsthat I've been dealing with
lately.
SPEAKER_04 (04:20):
Katie, just to play off of that, I just wanted, when
you said uncertainty, I think itwould be, we'd be remiss not to
raise the tariffs that went intoeffect this week.
And that, you know, when we'retalking about medical supplies
and equipment and things likethat, that physician practice
groups and hospitals and healthsystems are relying upon.
I think that kind of plays intothis as well, that we're not
(04:42):
even sure what that impact mayhave on these types of
providers.
SPEAKER_03 (04:47):
Great point.
And I've heard someone mentioninflation, Katie, it may have
been you.
I've been hearing a lot of ourprovider clients mention that in
terms of physician compensation.
Can you talk a little bit abouthow you've seen that impact your
day-to-day specifically?
Sure.
SPEAKER_01 (05:04):
Yeah, so I certainly have heard a lot about it from
my clients and their physicians.
I've seen a couple differentthings occur.
One thing that happened wasaround COVID and some other
times, compensation reallyincreased to...
kind of account for all thisdifferent work and different
situations that were occurring.
So there were some really bigincreases.
(05:24):
And now I've seen some providerssay, well, inflation's gone up,
I haven't gotten a compensationraise.
But when we look at theircompensation, it's actually
pretty fair.
And so it was kind of like theygot this big bump a couple years
ago.
And now that the market's caughtup, and there's not really room
or opportunity or justificationfor an increase, but they feel
this pressure because they'venot seen an increase and they're
(05:45):
seeing rising costs.
That's one narrative I've beendealing with.
The other is this narrative thatcompensation should be keeping
up with inflation and Actually,the most recent MGMA annual comp
study that came out, they have awonderful report that I
reference often.
But it said that for the mostpart, physician compensation has
(06:06):
been keeping up with inflation.
But what is interesting is thatproductivity is also increasing.
And so the compensation to workRV ratios that a lot of
contracts are based upon areactually decreasing or holding
steady, and those are notincreasing.
And the physicians, that's thenumber they see in their
contract, they say, Oh, I'vebeen at 52 per worker view for
(06:26):
or five years.
Why is that not increasing?
Well, the market would showwe're getting more efficient at
doing things.
We've got a lot of AI andresources and technology.
And so you can see more peopleand patients in the same amount
of time.
And so your productivity isgoing up for the same amount of
time.
Generally, you're compensatedroughly the same, same amount of
time.
(06:47):
And therefore, that ratio isholding steady or decreasing.
There's some where it'sincreasing, but I had a slide in
a recent presentation I gavewhere I showed a lot of the
specialties that comp for workreview has stayed flat or
decreased in some cases fromover the last five years as work
reviews has increased, but timereally hasn't changed.
(07:07):
So the physicians are devotingto the services.
And so that can be a really hardconversation when the physicians
are experiencing this inflation,but their unit measurement of
compensation is kind of stayingthe same.
SPEAKER_03 (07:19):
And then in terms of some of these issues you all
mentioned, I've heard delays inreimbursement, reduced
reimbursement, et cetera.
Do you feel like that's specificto any unique set of provider
type, rural versus urban,hospital, et cetera, or do you
think really everyone inhealthcare is experiencing these
issues?
I feel like all the healthcarepractices that I've been hearing
(07:41):
about are facing this.
Recently, I know there are wherebills passed, you know, on
Medicare and Medicaid cuts,which are really going to impact
the accessibility to healthcare,especially in rural areas and
affect hospitals, you know,affect patient care.
So I think that's something tothink about in the longer term.
(08:02):
But generally, I think withCOVID, you know, physicians were
putting in so much time andeffort and really all other
healthcare providers as well.
And After the Advent of NoSurprises Act and some other
bills, I think they're seeingthat payers are not willing to
be in contract anymore withprovider groups, hospitals, and
(08:27):
as a result, they're having toprovide these services,
obviously, you know, to patientsand they want to, but they're
not seeing anything reciprocatedback for the rendering of their
services.
And it's, you know, they'rebeing, their claims are being
denied for untimely filing orother reasons that just don't
make any sense.
(08:48):
And so I think it's becoming abroader and broader issue that
has really expanded since COVID.
SPEAKER_04 (08:55):
Wow.
Oh, I agree with what Payal saidin that regard.
I don't think it's unique to anyone type of health care
professional.
I do think that, you know, withthe increased pressure and
financial pressure and coststhat folks are experiencing,
(09:16):
basically facing that they'recoming up with strategies and
methods to try to deal withthese.
And that can run the gamut as towhether it's closing a service
line that's not producing thereimbursement level that you
might expect, joint venturingwith folks, involving in
engagements with private equityand venture capital groups.
(09:40):
There was, at least in WestVirginia, there was a time
period where we had a lot of, atleast private equity was
involved in some of thehospitals here.
Now, most of them are nonprofitsand we're seeing in other states
that there are entities that arebeing purchased by venture
capital companies.
And so that's kind of, you'reseeing another uptick in that
approach.
And so I think folks are justlooking for avenues and ways to
(10:03):
kind of deal with this financialuncertainty and the costs that
they are facing, whether it'srural or urban.
UNKNOWN (10:10):
Yeah.
SPEAKER_03 (10:11):
And just to piggyback on that, you mentioned
a couple of potential solutions,private equity, joint ventures.
What are some compliancepitfalls that these
organizations that are exploringthose solutions should be aware
of?
SPEAKER_04 (10:24):
Yeah, so I think when you start getting into
these types of arrangements, youhave to make sure that your
agreements are complying withfraud and abuse laws.
You need to make sure that yourantitrust risks, especially when
you're talking aboutconsolidating of health care
systems, you need to make surethat you're following
requirements with the FederalTrade Commission and the
(10:44):
Department of Justice and thatyou're keeping them involved in
the conversation, especially ifyou're triggering any of the
reporting requirements undertheir purviews.
you.
As well in some of the privateequity venture capital
arrangements, especially wherethey're taking over different
types of physician practices,you know, large physician
(11:04):
practices or entities, you haveto make sure that you're
complying with corporatepractice of medicine laws and
don't run afoul of those.
Also critical, which I know mostfolks on this call understand is
making sure that your change ofownership forms are being filled
out correctly, making sure thatyou're updating any requirements
with Medicare and Medicaid tomake sure that you do get
reimbursed.
When you do create thesestrategic alliances or
(11:27):
consolidate for purposes ofgaining the financial leverage
for purposes of reimbursement.
SPEAKER_01 (11:36):
Katie, Paul, anything else to add on that?
Yeah, I would just add, I agreewith Alina, a lot of the same
things, seeing some innovationand partnerships and the one
that comes to mind is Ascensionacquiring Amsurge, a big change
in kind of their model fromhospital operations to these
outpatient sites, 250 sites thatthey're adding, trying to be
(11:57):
competitive and see wherehealthcare is going and make
sure that they have resources toserve those patients rather than
just keeping them in thehospital.
So seeing some changes in themarket from hospitals and
healthcare A lot of them arecreating their own innovation
centers, trying to createtechnology and solutions and
that can be explored at scale sothat they can manage some of
(12:20):
these costs and financialpressures around staffing and
other items with some technologyand resources.
And then also trying to bring alot of things in-house where
they might have outsourceddifferent needs to various
companies specialized in thoseareas, trying to figure out a
way, can we do it internally?
better and basically cut outthat margin that, you know,
(12:42):
these companies are keeping forprofit and for all of their
infrastructure.
We've already got all thisinfrastructure.
We've got all the providers.
Can we make our own locums pod?
Can we do different things?
Now, obviously you have to havescale and size to do some of
those things, but thinking aboutall those services that may have
historically been provided likeanesthesia or radiology or other
(13:05):
items that were outsourced togroups, can you employ those or
find ways to bring them in-houseand manage that better and cut
out some of that margin thatyou're paying and keep that for
yourself.
So I think kind of uniquepartnerships, unique
investments, then kind ofinnovation centers and being
incubators for new technologyand ideas, a lot of systems,
(13:27):
Intermountain, LifePoint, theyall have those types of of
organizations within their wholesystem.
And then also thinking aboutwhat have you been paying
someone else to do that you canmaybe do better or at least
cheaper without, with a lowermargin, you know, or keeping
that margin yourself.
SPEAKER_03 (13:46):
And Payal, I'd like to go back to you for a second.
I know Awana and Katie mentionedsome central solutions and also
some compliance risk areas.
How are organizations dealingwith this, though, from a
budgetary perspective?
I mean, we just talked about allthese constraints at the
beginning of the call.
How are they addressing these?
(14:07):
Yeah, actually, my name ispronounced Pyle.
Yeah.
So, yeah, I think, you know,we're trying to ever think
company is looking creatively,right?
How are we trying to deal withthese budget cuts or financial
restraints?
And I think Part of it is whatKatie mentioned is looking at
(14:27):
technology and AI to assist witha lot of these features, whether
they be apps or making internalprocesses more efficient through
the advent of differenttechnologies or AI, using
different new devices orproducts, services that are
offered that can assist inmaking things more efficient and
(14:52):
making things done more quicklybut with a quality check that we
don't have to outsource or thatcan be done in a better way with
lesser internal resources.
And I think all those are reallyhelping to address that.
But alongside that, you want toalways make sure that you're not
undermining or downplaying thecompliance role that your
(15:16):
company has.
And so as a result of that,you're increasing your audits,
you're increasing your policies,procedures, and the role of
compliance and the legal teamplays in ensuring that despite
some of these financialrestraints, you're doing more
quality checks internally as aresult of these new
technologies.
(15:37):
But I think in addition to bothof those, I think, you know,
physicians primarily, I thinkproviders are really looking
internally to see what else canwe do to address the
affordability and accessibilityof care to patients when you
know, the payment of services,but also the rendering services
(16:00):
becomes limited as a result ofthe healthcare market and
environment.
And so I think, you know,telehealth and different
outpatient clinics and differentmodels of care are becoming also
something that physicians arelooking towards to really
provide care to patients despiteother financial restraints they
(16:21):
might be seeing at hospitals orwithin provider groups.
All right, so I'm going to shiftto focusing a bit more on the
strategies and solutions that wewere talking about earlier.
Can each of you share an exampleof a financial strategy or
restructuring that helps anorganization manage financial
pressures while also remainingcompliant with key regulation?
SPEAKER_04 (16:45):
Sure, I'll give a couple examples.
And these may or may not bespecific to just a particular
organization, service offeringwithin a facility.
It might not be talking about anentire restructuring.
But for example, a facility,hospital facility might do a
revenue cycle optimizationreview and try to, you know,
(17:06):
implement comprehensive revenuecycle management overhaul,
invest in additional technologyand billing mechanisms.
Maybe even now you might see theuse of some type of AI software
or something else utilized forefficiencies and to maximize and
improve billing, making sureyou're getting your times, you
know, your claims timely filed,also reducing denials.
(17:30):
And also, at the same point, youwouldn't want to, if somebody
was financially distressed, asPiles mentioned, you wouldn't
want to reduce your investmentin compliance or legal oversight
because you don't want toincrease potentially any issues
with the False Claims Act.
So you'd want to make sure thateverything is compliant and that
(17:52):
those are being billedconsistently.
But that's one way to kind ofoverhaul.
Another way might be Thank you.
SPEAKER_03 (18:19):
Okay, how do you collaborate to balance business
needs and compliance constraintswhen evaluating technology
investments or infrastructureupgrades?
Yeah, I think, you know, that'skind of a hard one, right?
Because you obviously want tofind vendors or new technology
(18:42):
that can assist with, you know,upgrading your systems or making
them better.
But then you're balancing-Right, exactly.
And I think that's where we'rehitting that, right?
You talked about inflation.
We talked about the rising costsof healthcare.
Well, at the same time, youreally don't want to spend that
(19:03):
extra money on these newfeatures, but how do you balance
that with the fact that, willthis help you become more
compliant?
Will this help you stand out?
you know, as a companyorganization, as a physician
group, from others goingforward.
So it's sometimes taking riskstoo of adopting new technologies
or new services or, you know,devices and products, but
(19:30):
balancing that with, well, howmuch risk do we want to take?
What internal processes do wehave in place to do a quality
check, to audit this, to reviewthis?
And then, you know, justensuring that I think when
you're collaborating withdifferent vendors that you are
ensuring you've taken the duediligence to do good research on
(19:52):
the privacy and any data relatedconcerns that you may have,
because that's a big safety riskas well presently.
And I think when you do all thatinternally with your compliance,
legal, finance, InfoSec teams, Ithink you're better set to still
move forward with these newtechnologies or new vendors.
(20:13):
hopefully with a moresuccessful, efficient pathway
forward.
I
SPEAKER_01 (20:18):
was just going to say my firm has a cybersecurity
arm in our advisory group andthey do high trust
certification.
So there's different programsand certifications that you can
determine whether if vendorsmeet these requirements that
they may be good candidates.
And so you have to do maybe lessassessment of them on the front
(20:42):
end because they have this stampof approval or they've gone
through this process.
But it is a very intensive, longprocess.
And so some of these newinnovative technologies that
Payal is talking about may nothave gone through that process
yet and or be willing to takethe time or the cost as they are
being innovative and new.
And there might be more of alift on the organization
(21:02):
organization side, but thatwould be one way to maybe
expedite implementation if theyhave already achieved certain
certifications and set that upthrough your vendor risk
management program on the frontend so that you can quickly
assess new technologies andimplement them, but know that
(21:23):
they will be compliant based onmeeting certain gates and
policies and procedures upfront.
We've also been helping a lot ofclients develop AI policies and
procedures and look at howthey're going to assess AI
technology and implement it andstart to use it and evaluate
vendors and technology as AIbecomes more, as it becomes
(21:47):
adopted more.
SPEAKER_03 (21:50):
Perfect.
So I have a question related tofinancial pressure and
regulatory compliance.
I originally earmarked this forAlana, but I do have a question,
Katie, specific to physiciancompensation.
I feel like this regulatorycompliance comes up a lot with
financial pressure where youalways have providers perhaps
concerned with gettingadditional compensation, but
(22:10):
there's governance in place thatkeeps that compensation at a
certain level.
How do you advise clients whenthey're tackling that every
single day on the providercompensation side?
SPEAKER_01 (22:22):
Yeah, you know, I talked about this a little bit,
you know, but with Michaela andtrying to think about kind of
some newer innovative ways toprovide additional compensation,
but to receive something morefor that.
And so I am seeing a lot ofclients starting to to utilize
value based services.
enterprise arrangements and forvalue-based purposes with
(22:44):
value-based activities andstarting to use those exceptions
and safe harbors more to createstrategic alignment and
financial alignment, but aroundeither things like service line
development and program buildingor more outcomes-based specific
arrangements with specificbenchmarks and requirements to
(23:07):
achieve those.
So the organization's receivingimproved quality, which is
better for patients and likelybetter from a financial
standpoint because a lot of thefinancials are tied to outcomes
and or looking at alternativepayment models and participating
to receive if they have improvedquality to receive super shared
(23:29):
savings or other opportunitiesfor incentive payments from
payers.
If you can demonstrate thatyou're best in the market at
certain things, there's a lot ofmoney to be made out there
through arrangements withpayers.
But then to your point,evaluating those models and even
(23:50):
just administratively processingthem and paying them can be
really challenging.
You have to make sure you haveall of the right data and
processes in place to evenmeasure quality and report that
out and then track and pay theproviders.
And so that's where thecompliance can be really key
when you create thosearrangements.
And then also even just yourpayer contract arrangements.
(24:12):
You've seen one, you've seenone.
And how you get paid and it'stwo years later can be really
complex to understand if it'sfinancially viable to enter into
those and what entering intothose mean.
We're actually doing, to Elena'spoint, a kind of revenue cycle
optimization project aroundvalue-based care contracts and
(24:33):
how they process those and getpaid and model out the
likelihood of payment and getbetter at really getting their
arms around these contracts andthe financial implications of
that from a modeling andlong-term perspective.
SPEAKER_03 (24:48):
Helena, I know Kay just mentioned it, but could you
talk a little bit from a legalperspective, how you keep your
clients to make sure that theystay ahead of these financial
pressures, but also keep an eyeon the legal risks as well?
SPEAKER_04 (25:03):
Sure.
I mean, I think we've kind ofall are saying, kind of speaking
the same language here, right?
You got to keep your folksinformed.
So I think there's transparency,right?
To the point that you can, youknow, keep your staff, your
employees, your board involvedin these that, you know, we are
having financial difficulties.
We are looking for new andinnovative ways to increase
(25:26):
reimbursement and giving all thedifferent things that are being
considered.
And, you know, Katie's hittingthe nail on the head and talking
about these physiciancompensation arrangements Thank
you so much.
(25:57):
participating within.
I do think, you know, and I knowthat folks may be aware of this
case, there's a Boeing case outthere that talks about mission
critical information.
And I think it's just makingsure that your compliance folks
at the board level, your financefolks at the board level are
being, you know, educated andreceiving the mission critical
(26:18):
information that's necessary forthem to help make these
decisions.
And you're going to want to makethem in the compliant manner
that we're recommending becausethere is personal liability that
could be attached to theexecutives and the board if
things are recklessly decided orif there could be negligence
involved in some of thesethings.
(26:38):
And so you want to make surethat you're evaluating the
situation and making thesedecisions with the critical
information that's beingprovided and consistent with
applicable regulations.
SPEAKER_03 (26:50):
Personal liability hits particularly, I think, home
to the C-suite because we see somuch of that in these cases.
Many of them are actually goingto prison for issues such as the
ones we've been talking about,which is no place anyone wants
to be.
Pat, were you about to saysomething?
Yeah, I was just going to add, Ithink just from an in-house
perspective, I think to yourpoint, Elena, having a good
(27:11):
governance structure anddifferent boards or work groups
that align and help get thatinformation across the
organization to the right folksand the right decision makers is
really crucial, right?
Ensuring that that...
that remains a compliant andinformed process.
That's for sure.
So this is a question for all ofyou.
(27:32):
What are the most commonregulatory compliance breakdowns
you've seen occur as an indirector direct result of financial
stress?
If you can tie your perspectiverole into the answer if
possible.
I can go first.
From an in-house perspective, Ithink You know, in general, I
see some gaps sometimes where wedon't always have the most
(27:55):
updated or, you know, properpolicies in place.
and ensuring that we get that inorder, the right policies,
procedures, having it go throughthe right process through the
work groups, the board ofdirectors, and then ensuring
this proper training to thevarious people involved, right?
Whether that be the front staffat different physician's offices
(28:17):
or internal in an organizationto the different departments who
are working on something, justensuring they have an
understanding of the process andthe policies, procedures, or
associated regulatory concerns Ithink is really helpful.
And then along those lines,ensuring that there's a good
audit or, you know, qualitycontrol process in place
(28:39):
internally, I think is reallycrucial to, you know, ensuring
that there's a well-informedaudit process that takes place,
whether, you know, quarterly orsemi-annually, annually,
whatever that may be for theprocess in place.
And then, you know, that need behaving external, you know,
consultant or audit come in tohelp improve those processes and
do a secondary audit or qualitycheck, I think really helps.
(29:02):
And, you know, sometimescompliance does get a little
less attention or sometimes canget dropped, right?
When there's financial concerns.
So you're just making sure thatthat's at the top of mind.
I'm really glad you mentionedtraining because I think that's
so important.
And then also regular repetitivetraining.
twice a year, every year,because there's so much turnover
(29:24):
in any aspect of healthcare.
And before you know it, what youtaught someone, they're left,
they've left.
Someone news come in and theydon't know the policies and
procedures you just referenced.
I think training is such a bigpart of that.
Elena, Katie, do you haveanything else to add?
SPEAKER_04 (29:38):
Yeah, I was just going to say to both of your
points, the compliance, thetraining, the continuing these
things, even when you're in afinancially stressful situation,
but not skirting them under therug.
So if you identify something inthat audit, even though I know
you're thinking maybe I don'thave the money to pay this back,
work with regulators.
(29:59):
That's where you engage theoutside counsel.
Open that conversation.
Don't ignore it if you'veidentified something that does
need to be cleaned up becausethat can limit your ability to
enter in some of theseinnovative relationships and go
forward with some type of jointventure or selling to a larger
health system.
That can create issues down theroad.
And also, I think to your pointon training and the turnover
(30:21):
that might be involved,especially if an institution is
in a financially stressfulsituation, is if you have that
person in billing that wasgetting all notices on X and
they've left, it's better tokind of set up these default
email addresses or a way formultiple folks to go in and
check when things are received.
(30:41):
Because I think that you also,things could fall through the
cracks when folks might becoming and going within an
organization.
UNKNOWN (30:48):
Yeah.
SPEAKER_01 (30:51):
Yeah, in my thought, I just see people moving too
quickly, meaning that they oftendon't get all the information or
have the right information ortake the time to analyze the
information around the deal orthe compensation or the
physician arrangement orwhatever it might be.
So just getting into a veryrushed situation, which to
(31:12):
Payal's point and others, youknow, may mean that they skip
processes and or maybe don'tfollow certain policies, which
take extra time when you'retrying to get a deal done
because it's needed.
Or, you know, I had an examplewith a client the other day
where they're trying to solvefor what is maybe more an an
operational issue by throwingmoney at it or making a change
(31:35):
to the financial aspects of thedeal.
And when we got on the phone andtalked to them, it turned out
that Well, let's not actuallyincrease this rate to attract
people to this service.
If they end up having to workthe whole day, let's just pay
them for a whole day, which youalready have a rate for.
So it was interesting because itwas like they had a rate for if
(31:57):
they got to leave and go homeearly and then everyone was
complaining it wasn't enoughbecause they were staying all
day.
Well, you already have a ratefor staying all day.
Just pay them that rate.
Don't increase this.
Maybe you'll get to go homeearly rate.
and kind of operationallyfiguring out how to adjust the
way you're doing somethingrather than just rushing to
(32:18):
change the financial terms of adeal that may have long-term
consequences and end up that youpay more because you're not
tracking those shifts or thetime that's being performed as
well.
So kind of pausing to talk aboutthe why behind the situation and
making sure you're taking thetime to review the information,
have good information and followyour, your policies and
(32:41):
procedures.
SPEAKER_03 (32:43):
That was a great example, Katie.
Elena, can you also give anexample, obviously anonymous,
for clients that may havesuffered some real life
consequences as a result ofrushing into decisions,
financial decisions because ofand not worrying about
compliance risk?
SPEAKER_04 (33:01):
Yeah, I think, I mean, kind of just to piggyback
on that, I guess if you, youknow, you enter into this
relationship because you'rerushed from a financial
perspective, right?
They don't kick the tires, youknow, whether it's the selling
or the buying entity, you're notkicking the tires.
You're not seeing, doing the duediligence.
You're not identifying the keyissues that you have to address
in any type of arrangementthat's being entered into.
(33:23):
And then you get, you know, ayear or two years down the road.
Well, who's responsible for X,Y, or Z because we didn't
identify it in the document So Ido think there's some examples
where, you know, financialpenalties are being assessed.
You know, cybersecurityincidents may have occurred that
weren't disclosed that creates,you know, long-term implications
(33:47):
for the deal.
I don't know if that's kind ofwhat you were getting at.
Okay.
SPEAKER_03 (33:53):
So I've got one final question for each of you
to wrap up the podcast.
What's one piece of advice you'dgive healthcare leaders trying
to navigate the intersection offinancial constraint and
regulatory
SPEAKER_04 (34:06):
compliance?
Set the tone at the top, youknow, be transparent, tell your
people, you know, you want to dothe right thing and just be
honest about the financialstruggle and not, you know, cut
corners on the money that'sinvolved in the compliance
aspect and the legal aspect ofmaking sure you're doing things
right.
SPEAKER_03 (34:29):
Yeah, I would say document everything and have a
robust compliance program inplace, as Alina mentioned, the
right policies, procedures inplace to ensure that you're
protected as an organization.
SPEAKER_01 (34:42):
Both of those are very good.
Maybe the only thing I'd add isengage your experts internally
or externally sooner in theprocess.
I see a lot of executives makedeals or have conversations and
then come back to legal or comeback to operations or outside
counsel or to the valuationprofessional after some things
(35:04):
already half baked or half done.
And that can create a lot ofchallenges.
Some people are smiling, likemaybe they've been in that
situation.
So just bringing in your expertsthat you have access to
internally and externally soonerto get some outside or internal
guidance from multiple avenues.
SPEAKER_02 (35:23):
Great
SPEAKER_01 (35:23):
feedback.
I think tone at the top anddocumentation are great as well.
SPEAKER_03 (35:28):
Document everything.
Agree on that perspective.
Thank you three so much forjoining us on this podcast.
Thank you and have a greatafternoon.
SPEAKER_01 (35:35):
Thanks so much for having us, Kate.
Thank
SPEAKER_03 (35:38):
you.
SPEAKER_00 (35:44):
To subscribe and add this private podcast feed to
your podcast app, go toAmericanHealthLaw.org
(36:14):
dailypodcast.
you
This episode of AHLA's Speaking of Health Law is
brought to you by AHLA membersand donors like you.
For more information, visitAmericanHealthLaw.org.
SPEAKER_03 (00:17):
Good afternoon.
Thank you for joining us ontoday's podcast titled In-House
Counsel, External Counsel, and aConsultant Walk into a Hospital,
Navigating Financial andRegulatory Pressures.
We're hoping this titled piquedyour interest.
It's not always a bad thing whenthese three professionals are
working together on something,but it certainly can be.
That said, we have a lot ofgreat content for you today, so
(00:38):
we'll go ahead and dig in.
My name is Kate Taylor.
I'm an associate principal atECG Management Consultants.
I've been providing valuationservices for approximately 15
years, and more often than not,I am usually working alongside
external counsel or in-housecounsel for many of my clients.
Today, I'm joined by threecolleagues of mine on the
(00:59):
Women's Leadership Council ofAHLA, and you likely guessed it,
but we do have an in-housecounsel, an external counsel,
and a consultant on thispodcast.
So I'll have each of themintroduce themselves briefly.
Katie, how about you get usstarted?
SPEAKER_01 (01:12):
Happy to.
Thank you, Kate.
As Kate said, I'm the consultantof the three of us today, and
I'm happy to be here.
My name is Katie Tarr.
I'm a shareholder at LBMC basedin Nashville, Tennessee.
SPEAKER_04 (01:25):
And my name is Elena Chrislip.
I guess I'm the externalcounsel.
I am a member at Jackson KellyPLLC in their transactional and
healthcare industry group.
SPEAKER_03 (01:36):
And I'm Payal Shah.
I'm senior counsel at Vituity.
It's a physician healthcareorganization.
And I've been practicinghealthcare law in-house for many
years.
Okay.
Thank you each for introducingyourselves.
So I'm going to kick this offwith a question for all of you.
What are some of the mostpressing financial pressures
(01:58):
you've seen healthcareorganizations grapple with over
the last 12 to 18 months?
I'm sure there's a lot, but ifyou can narrow them down to just
a couple, that'd be great.
Katie, do you want this?
Yeah, go ahead.
SPEAKER_04 (02:10):
Oh, okay.
I was just going to say some ofthe financial pressures that
I've seen over the last 12 to 18months, folks...
grapple with are increased laborcosts and workforce shortages,
inadequate Medicare and Medicaidreimbursement, inflation, rising
inflation costs has been acritical one.
(02:31):
And also I think delays inreimbursement from a commercial
practice payment perspective.
SPEAKER_03 (02:40):
Yeah, I was just going to say from a provider
standpoint, we've definitelybeen seeing reduced
reimbursement from the payers.
And then the advent of the Northsurprises act and other
regulations, you know, state orfederal that have really, you
know, put some hardships on thephysician and provider industry
(03:01):
and getting payment for theirservices has been really hard
over the past few years andreally the last year or so.
SPEAKER_01 (03:12):
On my side, I've seen a couple of things.
One is what I hear come up allthe time is uncertainty and with
uncertainty of how differentpolicies or market pressures are
going to occur, how that's goingto impact finances, people kind
of tightening their belts andtrying to hold steady and think
(03:33):
about the future and plan forall of these uncertainties,
which can take a lot of time andresources.
And then in my everyday job,which is more on provider
compensation.
I'm seeing a lot of increasingsubsidies for certain
specialties.
I think two comments from mycolleagues here as
reimbursements declining forphysician services, then the
(03:54):
required subsidies from thehospital is increasing.
And then I've also seen a lot ofcompetition for physicians, for
practices in markets, somereally competitive markets and
getting some late night phonecalls from my clients when their
physicians are getting offersfrom other organizations and
needing some quick responses.
(04:15):
So those are some of the itemsthat I've been dealing with
lately.
SPEAKER_04 (04:20):
Katie, just to play off of that, I just wanted, when
you said uncertainty, I think itwould be, we'd be remiss not to
raise the tariffs that went intoeffect this week.
And that, you know, when we'retalking about medical supplies
and equipment and things likethat, that physician practice
groups and hospitals and healthsystems are relying upon.
I think that kind of plays intothis as well, that we're not
(04:42):
even sure what that impact mayhave on these types of
providers.
SPEAKER_03 (04:47):
Great point.
And I've heard someone mentioninflation, Katie, it may have
been you.
I've been hearing a lot of ourprovider clients mention that in
terms of physician compensation.
Can you talk a little bit abouthow you've seen that impact your
day-to-day specifically?
Sure.
SPEAKER_01 (05:04):
Yeah, so I certainly have heard a lot about it from
my clients and their physicians.
I've seen a couple differentthings occur.
One thing that happened wasaround COVID and some other
times, compensation reallyincreased to...
kind of account for all thisdifferent work and different
situations that were occurring.
So there were some really bigincreases.
(05:24):
And now I've seen some providerssay, well, inflation's gone up,
I haven't gotten a compensationraise.
But when we look at theircompensation, it's actually
pretty fair.
And so it was kind of like theygot this big bump a couple years
ago.
And now that the market's caughtup, and there's not really room
or opportunity or justificationfor an increase, but they feel
this pressure because they'venot seen an increase and they're
(05:45):
seeing rising costs.
That's one narrative I've beendealing with.
The other is this narrative thatcompensation should be keeping
up with inflation and Actually,the most recent MGMA annual comp
study that came out, they have awonderful report that I
reference often.
But it said that for the mostpart, physician compensation has
(06:06):
been keeping up with inflation.
But what is interesting is thatproductivity is also increasing.
And so the compensation to workRV ratios that a lot of
contracts are based upon areactually decreasing or holding
steady, and those are notincreasing.
And the physicians, that's thenumber they see in their
contract, they say, Oh, I'vebeen at 52 per worker view for
(06:26):
or five years.
Why is that not increasing?
Well, the market would showwe're getting more efficient at
doing things.
We've got a lot of AI andresources and technology.
And so you can see more peopleand patients in the same amount
of time.
And so your productivity isgoing up for the same amount of
time.
Generally, you're compensatedroughly the same, same amount of
time.
(06:47):
And therefore, that ratio isholding steady or decreasing.
There's some where it'sincreasing, but I had a slide in
a recent presentation I gavewhere I showed a lot of the
specialties that comp for workreview has stayed flat or
decreased in some cases fromover the last five years as work
reviews has increased, but timereally hasn't changed.
(07:07):
So the physicians are devotingto the services.
And so that can be a really hardconversation when the physicians
are experiencing this inflation,but their unit measurement of
compensation is kind of stayingthe same.
SPEAKER_03 (07:19):
And then in terms of some of these issues you all
mentioned, I've heard delays inreimbursement, reduced
reimbursement, et cetera.
Do you feel like that's specificto any unique set of provider
type, rural versus urban,hospital, et cetera, or do you
think really everyone inhealthcare is experiencing these
issues?
I feel like all the healthcarepractices that I've been hearing
(07:41):
about are facing this.
Recently, I know there are wherebills passed, you know, on
Medicare and Medicaid cuts,which are really going to impact
the accessibility to healthcare,especially in rural areas and
affect hospitals, you know,affect patient care.
So I think that's something tothink about in the longer term.
(08:02):
But generally, I think withCOVID, you know, physicians were
putting in so much time andeffort and really all other
healthcare providers as well.
And After the Advent of NoSurprises Act and some other
bills, I think they're seeingthat payers are not willing to
be in contract anymore withprovider groups, hospitals, and
(08:27):
as a result, they're having toprovide these services,
obviously, you know, to patientsand they want to, but they're
not seeing anything reciprocatedback for the rendering of their
services.
And it's, you know, they'rebeing, their claims are being
denied for untimely filing orother reasons that just don't
make any sense.
(08:48):
And so I think it's becoming abroader and broader issue that
has really expanded since COVID.
SPEAKER_04 (08:55):
Wow.
Oh, I agree with what Payal saidin that regard.
I don't think it's unique to anyone type of health care
professional.
I do think that, you know, withthe increased pressure and
financial pressure and coststhat folks are experiencing,
(09:16):
basically facing that they'recoming up with strategies and
methods to try to deal withthese.
And that can run the gamut as towhether it's closing a service
line that's not producing thereimbursement level that you
might expect, joint venturingwith folks, involving in
engagements with private equityand venture capital groups.
(09:40):
There was, at least in WestVirginia, there was a time
period where we had a lot of, atleast private equity was
involved in some of thehospitals here.
Now, most of them are nonprofitsand we're seeing in other states
that there are entities that arebeing purchased by venture
capital companies.
And so that's kind of, you'reseeing another uptick in that
approach.
And so I think folks are justlooking for avenues and ways to
(10:03):
kind of deal with this financialuncertainty and the costs that
they are facing, whether it'srural or urban.
UNKNOWN (10:10):
Yeah.
SPEAKER_03 (10:11):
And just to piggyback on that, you mentioned
a couple of potential solutions,private equity, joint ventures.
What are some compliancepitfalls that these
organizations that are exploringthose solutions should be aware
of?
SPEAKER_04 (10:24):
Yeah, so I think when you start getting into
these types of arrangements, youhave to make sure that your
agreements are complying withfraud and abuse laws.
You need to make sure that yourantitrust risks, especially when
you're talking aboutconsolidating of health care
systems, you need to make surethat you're following
requirements with the FederalTrade Commission and the
(10:44):
Department of Justice and thatyou're keeping them involved in
the conversation, especially ifyou're triggering any of the
reporting requirements undertheir purviews.
you.
As well in some of the privateequity venture capital
arrangements, especially wherethey're taking over different
types of physician practices,you know, large physician
(11:04):
practices or entities, you haveto make sure that you're
complying with corporatepractice of medicine laws and
don't run afoul of those.
Also critical, which I know mostfolks on this call understand is
making sure that your change ofownership forms are being filled
out correctly, making sure thatyou're updating any requirements
with Medicare and Medicaid tomake sure that you do get
reimbursed.
When you do create thesestrategic alliances or
(11:27):
consolidate for purposes ofgaining the financial leverage
for purposes of reimbursement.
SPEAKER_01 (11:36):
Katie, Paul, anything else to add on that?
Yeah, I would just add, I agreewith Alina, a lot of the same
things, seeing some innovationand partnerships and the one
that comes to mind is Ascensionacquiring Amsurge, a big change
in kind of their model fromhospital operations to these
outpatient sites, 250 sites thatthey're adding, trying to be
(11:57):
competitive and see wherehealthcare is going and make
sure that they have resources toserve those patients rather than
just keeping them in thehospital.
So seeing some changes in themarket from hospitals and
healthcare A lot of them arecreating their own innovation
centers, trying to createtechnology and solutions and
that can be explored at scale sothat they can manage some of
(12:20):
these costs and financialpressures around staffing and
other items with some technologyand resources.
And then also trying to bring alot of things in-house where
they might have outsourceddifferent needs to various
companies specialized in thoseareas, trying to figure out a
way, can we do it internally?
better and basically cut outthat margin that, you know,
(12:42):
these companies are keeping forprofit and for all of their
infrastructure.
We've already got all thisinfrastructure.
We've got all the providers.
Can we make our own locums pod?
Can we do different things?
Now, obviously you have to havescale and size to do some of
those things, but thinking aboutall those services that may have
historically been provided likeanesthesia or radiology or other
(13:05):
items that were outsourced togroups, can you employ those or
find ways to bring them in-houseand manage that better and cut
out some of that margin thatyou're paying and keep that for
yourself.
So I think kind of uniquepartnerships, unique
investments, then kind ofinnovation centers and being
incubators for new technologyand ideas, a lot of systems,
(13:27):
Intermountain, LifePoint, theyall have those types of of
organizations within their wholesystem.
And then also thinking aboutwhat have you been paying
someone else to do that you canmaybe do better or at least
cheaper without, with a lowermargin, you know, or keeping
that margin yourself.
SPEAKER_03 (13:46):
And Payal, I'd like to go back to you for a second.
I know Awana and Katie mentionedsome central solutions and also
some compliance risk areas.
How are organizations dealingwith this, though, from a
budgetary perspective?
I mean, we just talked about allthese constraints at the
beginning of the call.
How are they addressing these?
(14:07):
Yeah, actually, my name ispronounced Pyle.
Yeah.
So, yeah, I think, you know,we're trying to ever think
company is looking creatively,right?
How are we trying to deal withthese budget cuts or financial
restraints?
And I think Part of it is whatKatie mentioned is looking at
(14:27):
technology and AI to assist witha lot of these features, whether
they be apps or making internalprocesses more efficient through
the advent of differenttechnologies or AI, using
different new devices orproducts, services that are
offered that can assist inmaking things more efficient and
(14:52):
making things done more quicklybut with a quality check that we
don't have to outsource or thatcan be done in a better way with
lesser internal resources.
And I think all those are reallyhelping to address that.
But alongside that, you want toalways make sure that you're not
undermining or downplaying thecompliance role that your
(15:16):
company has.
And so as a result of that,you're increasing your audits,
you're increasing your policies,procedures, and the role of
compliance and the legal teamplays in ensuring that despite
some of these financialrestraints, you're doing more
quality checks internally as aresult of these new
technologies.
(15:37):
But I think in addition to bothof those, I think, you know,
physicians primarily, I thinkproviders are really looking
internally to see what else canwe do to address the
affordability and accessibilityof care to patients when you
know, the payment of services,but also the rendering services
(16:00):
becomes limited as a result ofthe healthcare market and
environment.
And so I think, you know,telehealth and different
outpatient clinics and differentmodels of care are becoming also
something that physicians arelooking towards to really
provide care to patients despiteother financial restraints they
(16:21):
might be seeing at hospitals orwithin provider groups.
All right, so I'm going to shiftto focusing a bit more on the
strategies and solutions that wewere talking about earlier.
Can each of you share an exampleof a financial strategy or
restructuring that helps anorganization manage financial
pressures while also remainingcompliant with key regulation?
SPEAKER_04 (16:45):
Sure, I'll give a couple examples.
And these may or may not bespecific to just a particular
organization, service offeringwithin a facility.
It might not be talking about anentire restructuring.
But for example, a facility,hospital facility might do a
revenue cycle optimizationreview and try to, you know,
(17:06):
implement comprehensive revenuecycle management overhaul,
invest in additional technologyand billing mechanisms.
Maybe even now you might see theuse of some type of AI software
or something else utilized forefficiencies and to maximize and
improve billing, making sureyou're getting your times, you
know, your claims timely filed,also reducing denials.
(17:30):
And also, at the same point, youwouldn't want to, if somebody
was financially distressed, asPiles mentioned, you wouldn't
want to reduce your investmentin compliance or legal oversight
because you don't want toincrease potentially any issues
with the False Claims Act.
So you'd want to make sure thateverything is compliant and that
(17:52):
those are being billedconsistently.
But that's one way to kind ofoverhaul.
Another way might be Thank you.
SPEAKER_03 (18:19):
Okay, how do you collaborate to balance business
needs and compliance constraintswhen evaluating technology
investments or infrastructureupgrades?
Yeah, I think, you know, that'skind of a hard one, right?
Because you obviously want tofind vendors or new technology
(18:42):
that can assist with, you know,upgrading your systems or making
them better.
But then you're balancing-Right, exactly.
And I think that's where we'rehitting that, right?
You talked about inflation.
We talked about the rising costsof healthcare.
Well, at the same time, youreally don't want to spend that
(19:03):
extra money on these newfeatures, but how do you balance
that with the fact that, willthis help you become more
compliant?
Will this help you stand out?
you know, as a companyorganization, as a physician
group, from others goingforward.
So it's sometimes taking riskstoo of adopting new technologies
or new services or, you know,devices and products, but
(19:30):
balancing that with, well, howmuch risk do we want to take?
What internal processes do wehave in place to do a quality
check, to audit this, to reviewthis?
And then, you know, justensuring that I think when
you're collaborating withdifferent vendors that you are
ensuring you've taken the duediligence to do good research on
(19:52):
the privacy and any data relatedconcerns that you may have,
because that's a big safety riskas well presently.
And I think when you do all thatinternally with your compliance,
legal, finance, InfoSec teams, Ithink you're better set to still
move forward with these newtechnologies or new vendors.
(20:13):
hopefully with a moresuccessful, efficient pathway
forward.
I
SPEAKER_01 (20:18):
was just going to say my firm has a cybersecurity
arm in our advisory group andthey do high trust
certification.
So there's different programsand certifications that you can
determine whether if vendorsmeet these requirements that
they may be good candidates.
And so you have to do maybe lessassessment of them on the front
(20:42):
end because they have this stampof approval or they've gone
through this process.
But it is a very intensive, longprocess.
And so some of these newinnovative technologies that
Payal is talking about may nothave gone through that process
yet and or be willing to takethe time or the cost as they are
being innovative and new.
And there might be more of alift on the organization
(21:02):
organization side, but thatwould be one way to maybe
expedite implementation if theyhave already achieved certain
certifications and set that upthrough your vendor risk
management program on the frontend so that you can quickly
assess new technologies andimplement them, but know that
(21:23):
they will be compliant based onmeeting certain gates and
policies and procedures upfront.
We've also been helping a lot ofclients develop AI policies and
procedures and look at howthey're going to assess AI
technology and implement it andstart to use it and evaluate
vendors and technology as AIbecomes more, as it becomes
(21:47):
adopted more.
SPEAKER_03 (21:50):
Perfect.
So I have a question related tofinancial pressure and
regulatory compliance.
I originally earmarked this forAlana, but I do have a question,
Katie, specific to physiciancompensation.
I feel like this regulatorycompliance comes up a lot with
financial pressure where youalways have providers perhaps
concerned with gettingadditional compensation, but
(22:10):
there's governance in place thatkeeps that compensation at a
certain level.
How do you advise clients whenthey're tackling that every
single day on the providercompensation side?
SPEAKER_01 (22:22):
Yeah, you know, I talked about this a little bit,
you know, but with Michaela andtrying to think about kind of
some newer innovative ways toprovide additional compensation,
but to receive something morefor that.
And so I am seeing a lot ofclients starting to to utilize
value based services.
enterprise arrangements and forvalue-based purposes with
(22:44):
value-based activities andstarting to use those exceptions
and safe harbors more to createstrategic alignment and
financial alignment, but aroundeither things like service line
development and program buildingor more outcomes-based specific
arrangements with specificbenchmarks and requirements to
(23:07):
achieve those.
So the organization's receivingimproved quality, which is
better for patients and likelybetter from a financial
standpoint because a lot of thefinancials are tied to outcomes
and or looking at alternativepayment models and participating
to receive if they have improvedquality to receive super shared
(23:29):
savings or other opportunitiesfor incentive payments from
payers.
If you can demonstrate thatyou're best in the market at
certain things, there's a lot ofmoney to be made out there
through arrangements withpayers.
But then to your point,evaluating those models and even
(23:50):
just administratively processingthem and paying them can be
really challenging.
You have to make sure you haveall of the right data and
processes in place to evenmeasure quality and report that
out and then track and pay theproviders.
And so that's where thecompliance can be really key
when you create thosearrangements.
And then also even just yourpayer contract arrangements.
(24:12):
You've seen one, you've seenone.
And how you get paid and it'stwo years later can be really
complex to understand if it'sfinancially viable to enter into
those and what entering intothose mean.
We're actually doing, to Elena'spoint, a kind of revenue cycle
optimization project aroundvalue-based care contracts and
(24:33):
how they process those and getpaid and model out the
likelihood of payment and getbetter at really getting their
arms around these contracts andthe financial implications of
that from a modeling andlong-term perspective.
SPEAKER_03 (24:48):
Helena, I know Kay just mentioned it, but could you
talk a little bit from a legalperspective, how you keep your
clients to make sure that theystay ahead of these financial
pressures, but also keep an eyeon the legal risks as well?
SPEAKER_04 (25:03):
Sure.
I mean, I think we've kind ofall are saying, kind of speaking
the same language here, right?
You got to keep your folksinformed.
So I think there's transparency,right?
To the point that you can, youknow, keep your staff, your
employees, your board involvedin these that, you know, we are
having financial difficulties.
We are looking for new andinnovative ways to increase
(25:26):
reimbursement and giving all thedifferent things that are being
considered.
And, you know, Katie's hittingthe nail on the head and talking
about these physiciancompensation arrangements Thank
you so much.
(25:57):
participating within.
I do think, you know, and I knowthat folks may be aware of this
case, there's a Boeing case outthere that talks about mission
critical information.
And I think it's just makingsure that your compliance folks
at the board level, your financefolks at the board level are
being, you know, educated andreceiving the mission critical
(26:18):
information that's necessary forthem to help make these
decisions.
And you're going to want to makethem in the compliant manner
that we're recommending becausethere is personal liability that
could be attached to theexecutives and the board if
things are recklessly decided orif there could be negligence
involved in some of thesethings.
(26:38):
And so you want to make surethat you're evaluating the
situation and making thesedecisions with the critical
information that's beingprovided and consistent with
applicable regulations.
SPEAKER_03 (26:50):
Personal liability hits particularly, I think, home
to the C-suite because we see somuch of that in these cases.
Many of them are actually goingto prison for issues such as the
ones we've been talking about,which is no place anyone wants
to be.
Pat, were you about to saysomething?
Yeah, I was just going to add, Ithink just from an in-house
perspective, I think to yourpoint, Elena, having a good
(27:11):
governance structure anddifferent boards or work groups
that align and help get thatinformation across the
organization to the right folksand the right decision makers is
really crucial, right?
Ensuring that that...
that remains a compliant andinformed process.
That's for sure.
So this is a question for all ofyou.
(27:32):
What are the most commonregulatory compliance breakdowns
you've seen occur as an indirector direct result of financial
stress?
If you can tie your perspectiverole into the answer if
possible.
I can go first.
From an in-house perspective, Ithink You know, in general, I
see some gaps sometimes where wedon't always have the most
(27:55):
updated or, you know, properpolicies in place.
and ensuring that we get that inorder, the right policies,
procedures, having it go throughthe right process through the
work groups, the board ofdirectors, and then ensuring
this proper training to thevarious people involved, right?
Whether that be the front staffat different physician's offices
(28:17):
or internal in an organizationto the different departments who
are working on something, justensuring they have an
understanding of the process andthe policies, procedures, or
associated regulatory concerns Ithink is really helpful.
And then along those lines,ensuring that there's a good
audit or, you know, qualitycontrol process in place
(28:39):
internally, I think is reallycrucial to, you know, ensuring
that there's a well-informedaudit process that takes place,
whether, you know, quarterly orsemi-annually, annually,
whatever that may be for theprocess in place.
And then, you know, that need behaving external, you know,
consultant or audit come in tohelp improve those processes and
do a secondary audit or qualitycheck, I think really helps.
(29:02):
And, you know, sometimescompliance does get a little
less attention or sometimes canget dropped, right?
When there's financial concerns.
So you're just making sure thatthat's at the top of mind.
I'm really glad you mentionedtraining because I think that's
so important.
And then also regular repetitivetraining.
twice a year, every year,because there's so much turnover
(29:24):
in any aspect of healthcare.
And before you know it, what youtaught someone, they're left,
they've left.
Someone news come in and theydon't know the policies and
procedures you just referenced.
I think training is such a bigpart of that.
Elena, Katie, do you haveanything else to add?
SPEAKER_04 (29:38):
Yeah, I was just going to say to both of your
points, the compliance, thetraining, the continuing these
things, even when you're in afinancially stressful situation,
but not skirting them under therug.
So if you identify something inthat audit, even though I know
you're thinking maybe I don'thave the money to pay this back,
work with regulators.
(29:59):
That's where you engage theoutside counsel.
Open that conversation.
Don't ignore it if you'veidentified something that does
need to be cleaned up becausethat can limit your ability to
enter in some of theseinnovative relationships and go
forward with some type of jointventure or selling to a larger
health system.
That can create issues down theroad.
And also, I think to your pointon training and the turnover
(30:21):
that might be involved,especially if an institution is
in a financially stressfulsituation, is if you have that
person in billing that wasgetting all notices on X and
they've left, it's better tokind of set up these default
email addresses or a way formultiple folks to go in and
check when things are received.
(30:41):
Because I think that you also,things could fall through the
cracks when folks might becoming and going within an
organization.
UNKNOWN (30:48):
Yeah.
SPEAKER_01 (30:51):
Yeah, in my thought, I just see people moving too
quickly, meaning that they oftendon't get all the information or
have the right information ortake the time to analyze the
information around the deal orthe compensation or the
physician arrangement orwhatever it might be.
So just getting into a veryrushed situation, which to
(31:12):
Payal's point and others, youknow, may mean that they skip
processes and or maybe don'tfollow certain policies, which
take extra time when you'retrying to get a deal done
because it's needed.
Or, you know, I had an examplewith a client the other day
where they're trying to solvefor what is maybe more an an
operational issue by throwingmoney at it or making a change
(31:35):
to the financial aspects of thedeal.
And when we got on the phone andtalked to them, it turned out
that Well, let's not actuallyincrease this rate to attract
people to this service.
If they end up having to workthe whole day, let's just pay
them for a whole day, which youalready have a rate for.
So it was interesting because itwas like they had a rate for if
(31:57):
they got to leave and go homeearly and then everyone was
complaining it wasn't enoughbecause they were staying all
day.
Well, you already have a ratefor staying all day.
Just pay them that rate.
Don't increase this.
Maybe you'll get to go homeearly rate.
and kind of operationallyfiguring out how to adjust the
way you're doing somethingrather than just rushing to
(32:18):
change the financial terms of adeal that may have long-term
consequences and end up that youpay more because you're not
tracking those shifts or thetime that's being performed as
well.
So kind of pausing to talk aboutthe why behind the situation and
making sure you're taking thetime to review the information,
have good information and followyour, your policies and
(32:41):
procedures.
SPEAKER_03 (32:43):
That was a great example, Katie.
Elena, can you also give anexample, obviously anonymous,
for clients that may havesuffered some real life
consequences as a result ofrushing into decisions,
financial decisions because ofand not worrying about
compliance risk?
SPEAKER_04 (33:01):
Yeah, I think, I mean, kind of just to piggyback
on that, I guess if you, youknow, you enter into this
relationship because you'rerushed from a financial
perspective, right?
They don't kick the tires, youknow, whether it's the selling
or the buying entity, you're notkicking the tires.
You're not seeing, doing the duediligence.
You're not identifying the keyissues that you have to address
in any type of arrangementthat's being entered into.
(33:23):
And then you get, you know, ayear or two years down the road.
Well, who's responsible for X,Y, or Z because we didn't
identify it in the document So Ido think there's some examples
where, you know, financialpenalties are being assessed.
You know, cybersecurityincidents may have occurred that
weren't disclosed that creates,you know, long-term implications
(33:47):
for the deal.
I don't know if that's kind ofwhat you were getting at.
Okay.
SPEAKER_03 (33:53):
So I've got one final question for each of you
to wrap up the podcast.
What's one piece of advice you'dgive healthcare leaders trying
to navigate the intersection offinancial constraint and
regulatory
SPEAKER_04 (34:06):
compliance?
Set the tone at the top, youknow, be transparent, tell your
people, you know, you want to dothe right thing and just be
honest about the financialstruggle and not, you know, cut
corners on the money that'sinvolved in the compliance
aspect and the legal aspect ofmaking sure you're doing things
right.
SPEAKER_03 (34:29):
Yeah, I would say document everything and have a
robust compliance program inplace, as Alina mentioned, the
right policies, procedures inplace to ensure that you're
protected as an organization.
SPEAKER_01 (34:42):
Both of those are very good.
Maybe the only thing I'd add isengage your experts internally
or externally sooner in theprocess.
I see a lot of executives makedeals or have conversations and
then come back to legal or comeback to operations or outside
counsel or to the valuationprofessional after some things
(35:04):
already half baked or half done.
And that can create a lot ofchallenges.
Some people are smiling, likemaybe they've been in that
situation.
So just bringing in your expertsthat you have access to
internally and externally soonerto get some outside or internal
guidance from multiple avenues.
SPEAKER_02 (35:23):
Great
SPEAKER_01 (35:23):
feedback.
I think tone at the top anddocumentation are great as well.
SPEAKER_03 (35:28):
Document everything.
Agree on that perspective.
Thank you three so much forjoining us on this podcast.
Thank you and have a greatafternoon.
SPEAKER_01 (35:35):
Thanks so much for having us, Kate.
Thank
SPEAKER_03 (35:38):
you.
SPEAKER_00 (35:44):
To subscribe and add this private podcast feed to
your podcast app, go toAmericanHealthLaw.org
(36:14):
dailypodcast.
you
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