Kathleen Fisher Enyeart, counsel at Lathrop GPM, recently spoke with JDSupra to highlight key healthcare regulatory trends that she expects will shape the landscape for ASCs and physicians in the coming year.
Here are three key areas ASCs and physicians should closely monitor:
1. Private equity scrutiny and CMS compliance
Ms. Enyeart anticipates that private equity investments in healthcare will face heightened scrutiny, especially regarding compliance with CMS regulations. As private equity-backed entities seek to balance profitability and cost-efficiency, regulators are likely to question how these organizations are operating.
"Sometimes this is through health plans that are backed by private equity and are looking to reduce the overall cost of healthcare but also maximize profit. It’s difficult to do both of those things," she said. "You have to look at how that is happening. Are they failing to provide medical care that really should be provided to patients? Or are they increasing medical spend on procedures, medications, or visits that have a higher reimbursement rate but perhaps aren’t needed?"
With private equity increasingly controlling physician practices and ASCs, leaders must be vigilant to ensure financial pressures do not lead to fraudulent policies.
2. Potential Stark law violations by private equity firms
Another area where Ms. Enyeart foresees more regulatory focus is on potential Stark law violations. The Stark law poses significant risks to private equity investors unfamiliar with healthcare’s complex legal framework – physicians in private equity-owned groups must be vigilant about how these financial arrangements are structured to avoid legal pitfalls.
"As private equity investors come into this highly regulated space, the way they would normally try to incentivize referrals is not legal in healthcare," she said. "As they’re buying medical practices, are they doing that in a compliant way, and is the compensation being offered to doctors or practices compliant with Stark? I think we’re going to continue to see more scrutiny in that area."
3. Erosion of independent judgment in hospital- and health system-owned practices
Ms. Enyeart also noted that as hospital systems continue to acquire physician groups, the ability of physicians to make independent decisions may become increasingly constrained. This consolidation could limit the decision-making autonomy of physicians, as large health systems often set treatment protocols that prioritize cost-efficiency or system-wide goals.
"There's going to be less independent judgment for practitioners," Ms. Enyeart said. "I think we’re going to see that patients and their doctors have less ability to make those decisions on an independent basis based on the patients’ preferences and their view because I think we’re going to have more large health plans."