Medicare and Medicaid Change of Ownership Considerations in Healthcare Industry M&A


Summary

The Medicare program is a health insurance program administered by the federal government benefitting the elderly and disabled, and the Medicaid program is a health insurance program administered by the states benefitting low-income individuals. Together, the Medicare and Medicaid programs expend over $1.3 trillion annually—about one third of the entire U.S. national health expenditure—for healthcare items and services furnished to their beneficiaries. Given the dollars involved, it is no wonder that many providers and suppliers are highly dependent upon payments from these governmental programs. Yet, participation in these programs exposes providers and suppliers to significant risks of recoupment of payments, penalties, and false claims act liability if the regulatory requirements of these programs are not followed. Therefore, when a healthcare provider or supplier is involved in an M&A transaction, especially important considerations revolve around the provider’s or supplier’s ...