Overview
In this session, McDermott partners Matt Friendly and Ann Marie Brodarick moderated a panel discussion highlighting current considerations for buyers conducting legal and financial due diligence in healthcare M&A.
This session featured insights from the following panelists:
- Philip Pfrang, Partner, Deloitte
- Monica Wallace, Partner, McDermott Will & Emery
In Depth
Key takeaways included:
- Data processing speed has removed significant roadblocks for acquirers examining healthcare targets. There is no excuse to overlook billing practices, risk factor adjustments and estimation risk when evaluating targets.
- Lawyers and accountants should collaborate to ensure that revenue at healthcare targets is clean from a regulatory perspective. The large amount of government dollars poured into the healthcare sector in recent years makes it ripe for regulatory scrutiny.
- Some of the main healthcare regulatory risks facing healthcare targets include fraud and abuse compliance which takes into account state and federal self-referral, kickback and false claims laws; license, CON and corporate practice HIPAA; COVID waivers/flexibilities compliance and upcoming end of the public health emergency; and proper use of COVID-19 government funding.
- From a financial diligence and tax perspective, it is critical to align on the tax structure of a deal before reaching a finalized letter of intent.
- Instead of siloing specialists, buyers should encourage lawyers, accountants, tax advisors and healthcare-specific advisors to collaborate—for example, by conducting group calls among the various diligence providers.
- Human relations and a healthcare target’s ability to attract and retain top talent has become a primary issue in healthcare diligence.
