Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
By Meg McEvoy
If you didn’t already know, now you do: Nashville is a hot town for health care.
Five of the top 10 largest for-profit hospital systems are located in Nashville and its surrounding suburbs, according to Bloomberg data. Along with that comes a thriving market for health-care lawyers.
“Some cities are just great health-care towns, and Nashville is probably the greatest health-care town there is,” Matt Murer, chair of Polsinelli’s national health-care practice, told Bloomberg Law.
Polsinelli is the second-largest health-care law firm in the country, according to the American Health Lawyers Association 2017 rankings. Polsinelli opened a Nashville office in 2015.
Eighteen publicly traded health-care companies are headquartered in Nashville, with a combined employment of 500,000 and $84 billion in annual revenue, according to the Nashville Health Care Council’s annual report. According to the organization, Nashville is home to more than 800 companies working in health care.
“Nashville has been called the Silicon Valley of health care,” said Angela Humphreys, a partner and chair of the health-care practice group at Bass Berry & Sims, a Nashville-based firm with about 300 attorneys, over half of them dedicated to health-care clients.
According to Bloomberg data, the top hospitals (by number of facilities and beds) headquartered in the Nashville area are:
Four of these hospitals were also top for-profits in revenue, accounting for a combined $67.3 billion in the fourth quarter of 2017.
HCA, the largest for-profit hospital in the country, reported $43.6 billion in 2017 Q4.
Nashville law firm partners say they are seeing a recruiting boost from the town’s popularity.
“We’ve experienced significant growth over the past five to seven years in headcount at all levels of expertise,” Travis G. Lloyd, a partner with Bradley Arant Boult Cummings in Nashville, told Bloomberg Law.
Bass Berry & Sims announced in November 2017 it hired 13 associates in Nashville. That same month, Bradley Arant Boult Cummings, another leading Nashville health-care firm, announced it was adding 11 new associates in the city.
“We have a number of people who are interested in moving to Nashville,” Humphreys said. “Desire to be in the city is primary when attorneys are considering a position here.”
Humphreys noted that the sophistication of the health-care practice is also attractive for new attorneys.
“Many law firms in Nashville, including ours, have grown up with the health-care industry as it has matured in Nashville,” Humphreys said. “There is expertise in this city that is in some respects unmatched.”
The area overall is attracting new residents. Williamson and Davidson counties, which encompass Nashville and its surrounding area, have seen positive net migration of 1.46% since 2007, according to the U.S. Census Bureau.
The Nashville region also has seen a steady increase in its local demand for health-care services.
The number of Medicare-certified medical facilities in the Nashville area has steadily increased since 2013 (from 285 to 307). The increase has mostly come from federally qualified health centers, ambulatory surgical centers, and skilled nursing facilities, according to Centers for Medicare & Medicaid Services data.
Local enrollment in Medicare has increased 12 percent since 2013, according to CMS data.
With a thriving local health-care economy, and attorneys ready to do the legal work, which firms are getting litigation business?
Bloomberg Law’s Litigation Analytics tool analyzes filed cases available in its database.
The law firms most often appearing on behalf of HCA in litigation are: Shannon, Martin, Finkelstein, Alvarado & Dunne PC (9.9% of cases); Ogletree, Deakins, Nash, Smoak & Stewart PC (9.2% of cases); Goodwin & Goodwin LLP (8.2% of cases); and Spencer & Spencer PA (7.1% of cases), according to Bloomberg Litigation Analytics. Top case types being litigated by HCA are consumer credit cases (20.8% of caseload) and medical malpractice (19.1% of cases), according to the tool.
Community Health Systems, the second-largest Nashville-area hospital system, hires Bradley Arant Boult Cummings (8.5% of cases); Post & Schell PC (6.1% of cases); and Riley Warnock & Jacobson PLC (5.3% of cases), according to Bloomberg Litigation Analytics. Top cases being litigated by CHS are employment law cases (20.3% of caseload), according to the tool.
Nashville firms are seeing growth in the fraud and compliance area, due to increased enforcement and whistle-blower activity, Humphreys said.
Lloyd confirmed that his firm has seen an increase of False Claims Act cases, inquiries, and investigations.
Given all of the existing players in Nashville’s health-care legal market, Murer said, “it’s a more difficult market to go into” for outside law firms. Polsinelli decided to open its Nashville office “when we realized how much work we were getting out of Nashville,” Murer said.
Health-care transactional practice has also been robust, attorneys say.
In the transactional health-care space, Murer said, he is seeing more mergers between different kinds of providers. “Up until two years ago, you saw a lot of health systems getting bigger,” Murer said. “Now you’re seeing cross-sub-industry deals.”
Murer highlighted the ProMedica-Welltower joint venture to acquire HCR ManorCare assets, which he said is being discussed as a “transformative transaction,” with a hospital entering the long-term care industry. The acquisition will create an approximately $7 billion health network with 70,000 employees in 30 states, according to the companies.
“The very nature of who all the players on the stage are in health-care right now is changing,” Murer said.
“M&A activity has been a major source of work for our group over the past five- to seven-year period,” Lloyd said. “We have also experienced growth in different niche areas and added folks with expertise in health IT, accountable care organizations, and innovative payment models.”
Humphreys said she is seeing more private equity deals in the health-care space. “Over the last five years we have seen a sharp uptick in private equity investing in health-care services, particularly outpatient services companies,” Humphreys said.
Changes in how health-care services are billed and reimbursed will also drive health-care legal practice, Humphreys said.
“We’re in the process of a transition from a fee-for-service model to more of a value based model,” Humphreys said. “Working with clients on models that address that will continue to be an area of growth.”
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