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Health care law spurs business at law firms

After President Obama signed the health care overhaul into law, he promised it would “improve the lives of our people for generations to come.”

Already, lawyers are benefiting. Since the law passed in March, Missouri lawyers say many more calls are coming in from health care providers and employers with health benefits plans.

The result is that the new health care law will mean more revenue for firms with health care lawyers and employee benefit lawyers, as the law’s provisions are phased in over the next four years.

Charity Elmer is general counsel for CoxHealth, a three-hospital organization in the Springfield region. CoxHealth has turned to law firms to help it navigate the health care law’s thousands of pages of rules, she says. Photo by Mark Schiefelbein

“It’s going to be a good source for ongoing legal work because regulations are constantly coming out,” said Scott Hunt, an Armstrong Teasdale lawyer in St. Louis who focuses on employee benefits law.

How much lawyers can earn partly depends on the size of a client’s business. For example, it could take several months for a large employer to evaluate and restructure its benefits plan.

Health care and employee benefit lawyers say it’s not that they are flooded with new business, but they’ve experienced a moderate rise in demand this year during an otherwise economic slump.

“In a time where legal businesses are somewhat constrained and companies are being more conservative about seeking advice,” said Doug Neville, employee benefits practice group manager at Greensfelder, Hemker & Gale, “a law like this sort of helps in filling in the gap.”

Hospitals seek advice

Hospitals, physician groups and other health care providers are seeking advice from law firms’ health care practices. For example, after the law was passed in March, the general counsel for one of Kansas City’s largest hospitals sat down with lawyers at Polsinelli Shughart to strategize.

“It’s a lot to digest,” said Bill Colby, general counsel for Truman Medical Centers. “We’re just trying to get general advice from them on where the quality initiatives are and how to get out in front of those.”

Randy Schultz, vice chairman of the health care practice group at Polsinelli in Kansas City, has been hearing from many hospitals as well as physician groups. He said the new health care law is discussed in 90 percent of his meetings with his clients.

In the 26 years he has been in the practice group, this is his busiest year, he said.  The group, he said, is “picking up new business left and right.”

The new law creates incentives for health care providers to bundle services for Medicare patients or for people with specific conditions to ultimately improve quality and efficiency.  For example, the new law provides incentives for physicians and other providers to join together to form “accountable care organizations.” These are groups of hospitals, doctors and other health care providers with the goals of better controlling costs and improving health outcomes for patients. If the organizations provide higher quality care and reduced costs, they can expect incremental volumes of Medicare patients and higher profitability, said Bob Schwendinger, who leads Armstrong Teasdale’s health care practice.

But how these groups will operate is not yet clear because regulations still are being drafted, Schwendinger said. “The devil is in the details,” he said.

Lawyers say they are getting calls from physician groups, hospitals and other health care providers for advice on how to work together and how to establish accountable care organizations.

Schwedinger said his clients include health care providers who are asking for advice on how to structure or restructure their business in light of the new health care law.

Polsinelli’s clients, including hospitals and managed care organizations, are asking Schultz and other firm lawyers what kind of payment systems to use and whether to employ or contract with doctors, Schultz said. Even government officials from state insurance commissions have consulted with the firm on ways to structure the delivery of insurance programs, he said.

And like other lawyers in the nation’s capital, Polsinelli’s Washington lawyers are lobbying to influence the law’s regulations, which will dribble out in the coming years, Schultz said.

Jeff Ellis, the leader of the health care practice at Spencer Fane Britt & Browne in Kansas City, said all of his existing clients have made inquiries about the new health care law, resulting in more billable hours. The inquiries began picking up right after the law was passed, he said.

Spencer Fane appears so confident that the demand for advice on health care administration will be strong that it just formed a consulting business — Spencer Healthcare Strategists.

The consulting business will help health care clients and their attorneys in organizing their businesses and developing relationships with their communities, said Ellis, who also leads the consulting firm. The consulting business has picked up its first client, and Ellis expects the business to be self-sufficient within a few months.

“There’s a great demand for knowledge about the direction that health care reform is taking and the need to develop strategies to comply with reform and to reorganize businesses,” he said.

Jane Arnold, a Bryan Cave lawyer in the life science and health care practice group in St. Louis, said more health care provider clients are asking for help developing health care compliance plans.

Health care compliance plans set forth a company’s commitment to compliance and its policies and procedures. Formal plans are due by 2014 for all health providers, but health care providers are coming to Bryan Cave now, Arnold said. “They see the requirements coming and know it’s a good practice to have it in place now,” she said.

She knows of at least 12 clients who have asked Bryan Cave’s health care lawyers in the last five months to develop compliance plans.

Concerned employers

Hunt, the Armstrong Teasdale lawyer in employee benefits law, said his business volume has increased 25 percent since the law took effect. Employers are asking him what they have to do comply with the law, when to do it and ways to minimize the impact of the law on their businesses.

Some of the law’s provisions immediately affect employers’ benefits plans, such as the one that extends coverage of insured people’s adult children to age 26. In this provision, lawyers need to figure out the complexities of the law, such as whether stepchildren are covered.

“It’s going to be good for certain legal departments,” Hunt said, “because it’s a very technical area of the law.”

Lawyers who help clients develop benefits plans are used to frequent new rules for health regulation, said Lisa Van Fleet, at Bryan Cave. In the past, she helped clients comply with HIPAA, Mental Health Parity and Cobra regulations.

“There are always legislative and regulatory developments. So whatever the new one, that adds to our work plate. When that goes away, there’s always something else,” said Van Fleet, leader of the firm’s employee benefits and executive compensation client service group. “We’re used to that in our field.”

But Neville, in Greensfelder’s St. Louis office, said there’s more legal work for this law compared to previous health regulations “because it’s so comprehensive.”

He estimates the law could increase his practice group’s business by about 10 percent. “It has increased our business, no question about it. If we didn’t have health care, we probably would have been slower,” he said.

Growing legal field

Across the country, health care lawyers are getting more retainers from clients, said Ward Bower, a law firm consultant at Altman Weil, in Newtown Square, Pa.

He said he knows of firms with considerably higher revenues this year compared to last year, and, as a result, some firms are adding more lawyers to their health care practices.

“Any firm that concentrates on health care as a practice is probably going to find it’s going to pay off for them because it’s a segment of the economy that is growing and is not going to go away,” he said.

Health care providers’ legal departments can’t avoid hiring outside help in many cases. CoxHealth in Springfield has retained law firms to help its hospitals navigate through the thousands of pages of rules from the new health care law, said Charity Elmer, general counsel for CoxHealth.

“We are so busy in our day-to-day work,” she said. “It’s a better use of our time, given our workloads, to hire outside specialists.”

And Republican efforts to change the health care law or a court’s interpretation could lead to more even more work for lawyers who need to learn of adjustments to the law.

Of course, lawyers can’t reap the rewards without doing their fair share of research of the new law’s fine print. A group of health care lawyers planned to meet this past Friday in St. Louis to hear from experts about the portions of the law that apply to hospitals and physicians and about provisions affecting health plans.

“There is more work to do because every week it seems we get new regulations on some aspect of it,” said Kathy Butler, health care practice group manager at Greensfelder. “It’s a constant learning exercise.”