ILLINOIS: An Introduction to Illinois

Contributed by Katten Muchin Rosenman LLP

Regulation shifts and legal challenges abound in the healthcare industry, but these hurdles have not curtailed private equity investment. A multitude of acquisitions, add-ons and exit strategies for private equity sponsors are occurring in a variety of healthcare sectors, including imaging, urgent care, oncology, ambulatory surgery, rehabilitation, home health and post-acute care, behavioral health, substance abuse, physician and dental practice management, revenue cycle management, and healthcare technology. With the ultimate goal of growing investments while minimizing investor exposure, private equity sponsors are careful to analyze reimbursement parameters, regulatory requirements and compliance vulnerabilities, business opportunities, and the pros and cons of potential transactions in order to quickly identify risks during due diligence.

The following trends indicate how private equity investments in the healthcare industry may be considered to be on the rise:

1. Major health service providers—both health plan systems and hospital systems—are developing incubators. These business development arms function exclusively for the sake of the health service providers, making both minority and control investments in start-up and early-stage companies. If the venture—be it a pilot research program or a new medical device—fails, then it is only a minor financial loss. However, if it succeeds, the health service provider already has access to proprietary information, knows the management team well, and has the inside track to acquire the start-up before it goes to market and is sold to a competitor. This incubator strategy has become more noticeable in recent years, and we envision more of these in-house venture and private equity units will continue to appear. Quickly wising up to their impact, start-ups have added them to their must-call list when searching for investments.

2. Consolidation and integration serve as inroads to increased profits and a lower barrier to entry into the healthcare industry for private equity firms. Healthcare service providers outside of hospitals—such as occupational and physical therapy centers, imaging centers, and dental practices—remain fragmented fields. With less regulation and lower operating costs than medical facilities, they continue to be good targets for consolidation and aggregation. Non-medical services for both doctors and patients—such as billing, reimbursement, practice management and care consulting—are also attractive investment opportunities for private equity sponsors.

3. Analyzing cyber risks and rewards in the mobile health revolution is key. Start-ups are developing mobile healthcare solutions at a fast pace and actively seeking investments. Massive corporate hacking attacks have taught us that data security is not only fragile, but that breaches can be massively harmful, both financially and to the target’s reputation. In addition, patient privacy is a particularly risky area in healthcare investing. Sponsors should consider robust data security diligence of the technology before making an investment. Healthcare start-ups that can demonstrate strong cyber and data security will be more attractive to sponsors than those that have paid it short shrift. We also expect to see technology providers and consultants that can deliver sophisticated data security platforms and analyses, both for mobile healthcare companies and their investors, ramping up and becoming attractive targets for investment.

4. The traditional exit window is a five-to-seven-year timeframe. However, in recent years, that window seems to have widened to a three-to-nine-year exit horizon. We believe the causes include more fund-to-fund deals early in an investment’s life cycle coupled with historically low interest rates. They also include serious dislocations in M&A markets that are only now healing and an IPO market that has never fully recovered from the 2001 correction. As fund investors get more comfortable with longer time horizons, we expect that this will become the “new normal” for private equity funds in healthcare and other industries.

5. Investments in hospital properties provide interesting opportunities. Real estate investment trusts (REITs) are acquiring hospitals and spinning off the operations to be managed by other entities, while the REITs hold the hospitals’ long-term leases. Investment bankers predict more of these kinds of deals will appear in the market; if they do, deal participants will need to navigate the complicated intermixing of healthcare, tax and deal issues.

The healthcare private equity space is rife with opportunities at all price points. As start-ups and early-stage companies make more of an impact, new technologies continue to proliferate and present new offerings, established companies look for growth, and private equity sponsors have cash and leverage to put to good use, investments in healthcare are likely to grow.

Healthcare - Illinois


第一等 |

What the team is known for Comprehensive market-leading practice that excels in M&A, joint ventures and affiliations. Also much sought after for its regulatory and compliance advice by a wide range of healthcare clients, including hospital systems, clinical research organizations, and medical schools. Additionally noted for its strength in data privacy matters.

Strengths (Quotes mainly from clients)

"They have an extraordinary level of client service and responsiveness."

"They have a very broad-based team of experts." 

Work highlights Represented both Cadence Health and Northwestern Medicine in their $6 billion merger, which resulted in the creation of Chicago's second biggest healthcare system.

Acted on behalf of Main Line Health in its withdrawal from Jefferson Health System.

Notable practitioners

Bernadette Broccolo is widely recognized for her work in tax exemption and IT. "She is a very highly regarded, careful lawyer with extraordinary technical abilities," notes one interviewee.

Michael Peregrine is a nationally prominent healthcare attorney, noted for his transactional capabilities and advice concerning governance issues. He attracts significant praise for his client service, including his responsiveness, and his excellent work product.

Chicago healthcare practice head Kerrin Slattery enjoys a fine reputation at the Illinois healthcare Bar and is much sought after by hospitals and healthcare providers for her transactional expertise.

Ralph DeJong is recommended for his work on behalf of tax-exempt healthcare providers on employment issues, particularly benefits and executive compensation.

Daniel Melvin is noted for his expertise in issues concerning fraud and abuse in the healthcare sector, and is routinely sought after to advise on Stark law, compliance programs and Medicaid abuse.

Clare Ranalli is singled out for her work on certificate of need matters and is described as "very professional, very organized and very results-oriented."

Sandra DiVarco advises on transactions and restructurings, representing healthcare systems and other providers. She also draws acclaim for her "broad and deep command of regulatory issues."

John Callahan regularly represents private equity firms and nonprofit organizations in complex transactions.

Senior counsel Michael Anthony is renowned for his wealth of experience in healthcare transactions, including M&A, joint ventures and affiliations.

Significant clients Adventist Health System, Waud Capital Partners, UnityPoint Health, ProMedica Health System, The Mayo Clinic.

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What the team is known for Excellent group well versed in M&A and joint ventures and renowned for its expertise in healthcare private equity transactions. Regularly called upon for its regulatory compliance advice and also sought after for its counsel on antitrust and tax-exempt issues affecting healthcare clients.

Strengths (Quotes mainly from clients)

"They are exceptional." 

Work highlights Acted on the creation of the Clinical Research Exchange, a joint venture aimed at streamlining clinical trials. The team created the vehicle and drafted the participation agreements, and currently provides regulatory support.

Assisted in the establishment of the MHN accountable care organization (ACO), which comprises Rush Health, Sinai Health System and LaRabida Hospital, as well as five federally-qualified health centers. The team, acting for the ACO, prepared the documentation and negotiated with the stakeholders.

Notable practitioners

The "excellent" Louis Glaser is regularly sought after by healthcare providers, pharmaceutical companies and medical device manufacturers for his expertise in private offerings, M&A, joint ventures and reorganizations.

Michael Callahan is a nationally renowned attorney, noted for his work concerning hospital and medical staff relations, as well as antitrust, HIPAA and regulatory compliance. Sources reserve particular praise for his commercial approach to matters, with one interviewee noting: "He is willing to put on the hat of an executive or entrepreneur while still giving legal advice."

National practice head Laura Keidan Martin is "a very smart lawyer, very expert in regulatory and compliance issues." In addition to regulatory work, her practice includes antitrust law and fraud and abuse claims. 

Kenneth Davis comes recommended for his transactional and regulatory advice to hospitals, and is also noted for his counsel to physicians.  

Significant clients Community Health Systems, Presence Health, Northwestern Memorial Hospital, Lahey Clinic, Ortho Worx/Orthopedic Capital Foundation.

第二等 |

What the team is known for Noted for its high-caliber transactional practice and recognized for its work on behalf of ambulatory surgical center (ASC), dialysis and nephrology chains. Also sought after for its strengths on regulatory matters, including Medicare and Medicaid issues and HIPAA issues.

Strengths (Quotes mainly from clients)

"They were truly outstanding - they were with us night and day." 

"They have years of expertise and they are very professional, timely and accurate in their communications."

Work highlights Acted for Medical Specialties Distributors on the regulatory aspects of its sale by Walter Street to New Mountain Capital.

Handled the recent sale of Marquette Hospital.

Notable practitioners

James Riley is recognized for his strengths in acquisitions, joint ventures and accountable care organization (ACO) formation. Sources reserve praise for his "responsive and effective" approach and ability to mix technical skill and relationship management.

Scott Becker acts for hospitals, health systems, and private equity funds and lenders across a range of regulatory and transactional matters, and is also noted for his work on behalf of ASCs. Sources describe him as a "very savvy and excellent business lawyer with good strategy." 

Significant clients NorthShore University Health System, Providence Health & Services, HCA, ASCOA, Regent Surgical Health.

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What the team is known for Offers a full service to healthcare clients. Notable for its strength in certificate of need, physician integration and regulatory compliance work. 

Work highlights Successfully represented Centegra Health System litigation regarding a certificate of need to construct a new, on-replacement acute care hospital in Northwest Chicago. 

Acted for Fresenius Medical Care in its action against a state decision to grant a certificate of need for a dialysis facility.

Notable practitioners 

Mark Rust is the national healthcare practice head and managing partner in the Chicago office. He is noted for his regulatory and transactional work, and is frequently sought after to advise on antitrust, tax exemption and governance issues affecting the healthcare sector.

Significant clients Metropolitan Chicago Healthcare Council, Community Foundation of NW IN, American Medical Association, Land of Lincoln Health Insurance, American Medical Association.

第三等 |

What the team is known for Longstanding healthcare practice notable for its strengths in transactional and regulatory work. Routinely called upon to provide assistance on related antitrust issues and matters pertaining to anti-fraud and abuse compliance, HIPAA and bioethics. 

Strengths (Quotes mainly from clients)

"They are very smart and very practical: they find creative solutions to problems."

"They are consistently excellent: professional, client-oriented, responsive, and gave good legal counsel."

Work highlights Represented Metro Health, a Missouri Hospital, in an affiliation with Nashville's Community Health system. The joint venture, worth $300 million, aims to improve Metro Health by expanding its capacities and supplying capital.

Represented nonprofit healthcare system CharterCare Health Partners in an asset sale to for-profit Prospect Medical for both cash and a share of the joint venture to which the assets were sold.

Notable practitioners  

Healthcare practice group head Douglas Swill draws praise for his "tremendous, well-rounded expertise in healthcare." He advises on a wide range of regulatory and transactional issues, including M&A and acquisitions and governance matters, and is particularly singled out for his work in the nonprofit arena.

Significant clients John Hopkins Health System, Empire Health Foundation, Benefis Health System, Bon Secours Health System, Sun Health Services.

第三等 |

What the team is known for Wide-ranging practice that particularly excels in clinical integration matters. Also regularly engaged by clients for its compliance advice on issues relating to HIPAA, Medicare and Medicaid billing requirements, certificate of need, Stark analysis, and tax exemption. Additionally noted for its joint venture and acquisition work.

Strengths (Quotes mainly from clients)

"They are phenomenal at working with both physicians and senior administration."

"They are at the forefront of knowledge and technique in clinical integration."

Work highlights Advised Steward Health Care System on its formation and development of an ACO in the Pioneer ACO program.

Advised Tenet Healthcare on antitrust-compliant physician integration. 

Notable practitioners

Thomas Babbo draws particular praise for his experience in clinical alignment and physician integration, and is also recognized for his work on reimbursement issues, healthcare-related disputes and government investigations.

John Marren is noted for his excellent work in the integration space. He works across the nation with physicians, hospitals and other institutions. "He's able to go into situations where there's no trust and he's able to build trust around a vision of the future," an impressed client reports.

Carol Hogan has a wide-ranging healthcare practice, with a notable focus on the cutting-edge development and implementation of ACOs in the commercial, Pioneer and Medicare Shared Savings Program areas.

Significant clients Cook County Health and Hospitals System, SSM Health Care, Pronger Smith MedicalCare, Palmetto Health, Gulf South Quality Network.

第三等 |

What the team is known for Strong transactional and regulatory practice with notable strength in complex consolidation and integration matters. Also excels in tax-exempt finance work and accountable care and senior care issues.

Strengths (Quotes mainly from clients)

"They have highly skilled attorneys."

What's new? As of February 2015, Ungaretti & Harris LLP has merged with Nixon Peabody LLP, significantly strengthening its presence in Illinois and across the USA.

Work highlights Advised the 550 physician member faculty practice plan of the Lurie Children’s Hospital of Chicago with regard to a coordinated care network. The project involved the development and rollout of the network.

Acted for Presence Health and affiliates with regard to a bond restructuring. The bonds, a mixture of tax-exempt and taxable debt, were worth $560 million.

Notable practitioners  

Healthcare and government department chair Thomas Fahey acts in both the regulatory and transactional spheres. Peers describe him as "very knowledgable and very easy to work with."

The "very well-respected" John Durso has a strong practice in long-term care and counts numerous religious and nonprofit healthcare organizations among his clients.

Lynn Gordon acts for hospitals, doctors' groups and healthcare systems across a wide range of regulatory and transactional matters, including Stark compliance and M&A.

Healthcare finance group chair Julie Seymour is much sought after by borrowers and lenders for her expertise in both taxable and tax-exempt finance. 

Significant clients Alexian Brothers Health System, Ascension Health System, JP Morgan, Intermountain Healthcare, U.S. Renal Care.

Band 3 | Polsinelli PC

第三等 |

What the team is known for Maintains expertise across a wide variety of transactional and regulatory matters affecting the healthcare market. Enjoys a strong reputation for its work on behalf of academic medical centers, long-term care facilities and hospice providers, in addition to hospitals and other health systems. Routinely sought after for its strengths in issues relating to certificate of need and physician relationships. 

Strengths (Quotes mainly from clients)

"They are detail-oriented and thorough, and give sound advice."

Work highlights Represented UCLA Health System in a deal with the Motion Picture and Television Fund (MPTF). The partnership integrated the MPTF's outpatient facilities into UCLA's healthcare system. The deal involved the acquisition of numerous assets, including five patient health centers.

Provided counsel to Elk Regional Health System during its $42 million integration into the Penn Highlands health system.

Notable practitioners  

Matthew Murer heads the healthcare group and is a key contact.

Significant clients Catholic Health Initiatives, St Joseph Health System, Byram Healthcare, Exempla, Heartland Health.

第三等 |

What the team is known for Used by clients throughout the US on complex healthcare transactions. Also noted for its strengths in governmental investigations and cross-border regulatory matters.

Strengths (Quotes mainly from clients)

"They are easy to work with, accessible and well prepared, and handle different audiences very adroitly."

Work highlights Acted for Passavant Memorial Area Hospital on its affiliation with Memorial Health System, which involved gaining regulatory approval, conducting negotiations and advising the directors on their duties.

Represented Jewish Guild Healthcare in its merger with Lighthouse International, which included providing advice on the tax, IP and antitrust implications of the transaction.

Notable practitioners  

Monte Dube is commended for his expertise in complex, high-stakes transactions and is singled out by sources for his thoughtful and even-keeled approach to matters and his efficient delivery of work.

The "excellent" Elizabeth Mills is senior counsel at the firm and is particularly noted for her wealth of experience concerning tax exemption issues in the healthcare and nonprofit markets.

Significant clients West Virginia United Health Systems and Camden-Clark Memorial Hospital, Presence Health, Sumner Regional Health Systems, University of Chicago Medical Center, HCA.

第三等 |

What the team is known for Strong regulation practice, highly recommended for its strengths in litigation and government investigations. Possesses substantial experience in matters relating to HIPAA/Health Information Technology for Economic and Clinical Health privacy, fraud and abuse, False Claim Act and antitrust litigation. Particularly noted for its acclaimed work on behalf of major drug companies.

Strengths (Quotes mainly from clients)

"Sidley does a good job of giving balanced advice: they put on their business hats and think things through."

"They have very deep regulatory expertise." 

Work highlights Represented Omincare in its successful defense against a qui tam suit. The suit concerned allegations of violations of the False Claims Act, and was challenged under Rules 12(b)(6) and 9(b), leading to the voluntary dismissal of the claims with prejudice.

Acting for St Luke's Health System in its antitrust litigation against the FTC and others. The suit concerns an affiliation between St Luke's and the Salzer Medical Group, a physician practice, and its affect on competition in Nampa, Idaho.

Notable practitioners

Regional group head and national group cochair Richard Raskin maintains a strong practice, notably covering antitrust and fraud litigation. He is described as a "very skilled practitioner" and receives further praise for his strategic thinking and industry knowledge.

Meenakshi Datta has a broad regulatory practice, covering HIPAA, fraud and abuse and compliance programs, among others. One satisfied client praises her "great depth of subject matter expertise which spans various health law industries."

Honey Skinner is recognized for her regulatory work, frequently representing hospitals, physician groups and healthcare systems, and she draws much praise for her experience in the field.

Significant clients The Institute of Orthopaedic Surgery, Allergan, Athrex, Astellas Pharma, Bayer.

第三等 |

What the team is known for Boutique law firm specializing in the healthcare sector. Has a strong offering across regulatory matters and is noted for its expertise in antitrust and technology concerning healthcare. Also renowned for its work on behalf of major insurers and insurance federations.  

Strengths (Quotes mainly from clients)

"They are efficient because of their experience."  

Work highlights Acting as special counsel for a Chapter 7 Bankruptcy trustee involved in In Re Cornhusker RBM, LLC. The work includes managing HIPAA compliance during the liquidation of a firm holding sensitive health information. 

Notable practitioners  

Kathryn Roe is recognized for her expertise in regulatory matters and is recommended for her expertise in insurance, benefits and complex outsourcing issues. She elicits much praise for her wealth of knowledge, her creativity and her conscientious and hard-working approach to matters.

Jack Rovner's work spans regulation, including antitrust matters, fraud and abuse compliance and data privacy issues. "He is very thorough, very confident in his opinions and very competent in the advice he gives," notes one impressed source.

Band 4 | Dentons

第四等 |

What the team is known for Strong all-around healthcare practice, much sought after for its expertise in M&A, affiliations and joint ventures, as well as issues concerning general corporate governance. Also noted for its particularly strong capacities in healthcare finance, often dealing with covenants and tax exempt bonds. 

Strengths (Quotes mainly from clients)

"They are responsive and intuitive, and give concise business answers." 

Work highlights Acted for SCL Health System on its affiliation with National Jewish Health. This involved regulatory counseling and negotiating and documenting affiliation documents.

Advised Walgreen's on the merger of its pharmaceutical offering with CareMetx. The new entity will seek to aid intellectual property owners in the commercialization of their products in the healthcare arena.

Notable practitioners  

Mary Wilson is a transactional lawyer with a notable practice in tax-exempt financing. She attracts widespread praise, with one impressed client describing her as "very good on a technical level, practical and easy to work with." 

Department cochair Kathryn Ashton is recommended for work on behalf of global financial institutions and draws acclaim for her knowledge, creativity and hardworking approach.

Significant clients Bank of America, Goldman Sachs, JP Morgan, B.C. Ziegler and Company, Citigroup.

Band 4 | Jones Day

第四等 |

What the team is known for Recognized for its strengths in M&A, joint ventures and affiliations, and is also highly rated for disputes concerning Medicare and Medicaid, fraud and abuse, and the False Claims Act. Additionally recommended for its advice regarding Affordable Care Act issues and physician integration.

Work highlights Successfully defended LabCorp in two actions under state-level equivalents of the federal False Claims Act. In Georgia, the initial complaint was dismissed by the Northern District of Georgia, while the qui tam action in Virginia was dismissed by the District Court with prejudice

Currently acting for LabCorp in a qui tam case under the Florida False Claims Act, alleging fraud against Florida's Medicaid program.

Notable practitioners  

Gerald Griffith is recognized for his transactional and regulatory expertise, notably in tax exemption. Sources praise his "high command of the legal issues affecting healthcare entities" balanced with "practical solutions for the client." 

Heather O'Shea is recommended for her strengths in litigation and government investigations, and is also renowned for her advice on matters pertaining to Stark law, the Anti-Kickback statute and compliance programs.

Significant clients Atlantic Health System, Cleveland Clinic Foundation, Board of Regents of the University of Michigan, Bon Secours Health System, John Muir Health.

Other Ranked Lawyers 其他上榜律师

Jane McCahill of Akerman LLP is recommended for her work acting for healthcare organizations in internal and government investigations and is also routinely called upon for her advice on Stark law compliance.

Nicholas Lynn of Duane Morris LLP has a strong base of expertise and experience in long-term care, and is also routinely called upon for his strengths in healthcare disputes and regulatory compliance issues. Sources reserve particular praise for his time sensitivity, range of knowledge and proactive approach to working with his clients.

Edward Green of Foley & Lardner LLP advises on a wide scope of transactional matters alongside general business strategy, including M&A and joint ventures. He is also noted for his advice on restructuring issues and certificates of need matters.

Elias Matsakis is head of the Chicago healthcare and life sciences team at Holland & Knight LLP. He maintains a strong transactional practice, representing healthcare systems and physicians' groups, among others. One client praises the practicality of his advice: "He excels in his understanding of business: he helps come up with solutions to business problems."

Deborah Gersh is the co-head of Ropes & Gray LLP's healthcare practice. She advises on regulatory work, including HIPAA and its state-level equivalents, and represents a wide range of clients, from managed care companies to community hospitals. "She is calm, clearly knows her stuff, listens, tries to understand your perspectives and adapts to the feedback you're giving her," reports one satisfied client. 

Patrick Coffey of Whyte Hirschboeck Dudek S.C. defends both individuals and corporations in white-collar litigation. He acts at the local, state and federal level, and is also noted for his advice on corporate compliance.

Foreign Experts

Foreign Experts are individuals with expertise in a different jurisdiction to the one they are based in. These individuals are particularly highly regarded for international and cross-border work. Usually, they will be identified in the jurisdiction in which they are based and in their country of expertise.

Senior Statesman

A 'Senior Statesman' is a lawyer who no longer works hands-on with the same intensity but who, by virtue of close links with major clients, remains pivotal to the firm’s success.

Eminent Practitioners

'Eminent Practitioners' are highly influential lawyers in a particular practice area who, due to managerial or client relationship commitments, are less active in day-to-day work but remain key players in the team.

Other Noted Practitioners

Other Noted Practitioners are individuals who have not yet been ranked but are seen to be active and accomplished in this area of law.

Other Noted Firms

Other Noted Firms are firms that have not yet been ranked but are seen to be active and accomplished in this area of law.