Healthcare Financing Anti-assignment Limitations

Summary

This practice note describes how to structure financing transactions for healthcare providers to overcome anti-assignment and collection limitations on Medicare and Medicaid receivables. The Uniform Commercial Code (UCC) generally prohibits restrictions on assignment, making it possible for secured lenders to obtain a perfected security interest in these assets. However, other regulations make it difficult for lenders to collect on these receivables. Lawyers, therefore, use a "double lockbox" mechanism to work around these federal regulations. You should be familiar with this structure and its legal status as defined in recent case law.