Limiting Successor Liability Under Assigned Medicare Provider Agreements

Recent years have seen an uptick in distressed health-care mergers and acquisitions as providers and systems struggle to adjust to a changing economic climate. Significant changes have taken place in health care service delivery as a result of the enactment of the Patient Protection & Affordable Care Act (“Obamacare”) in 2010. Expenditures have increased due to the cost to implement reforms, including capital investments in information technology systems and new patient care and integration models. At the same time, revenues have decreased due to the availability of fewer government funds and the government's efforts to reduce Medicare-related costs. As a result, more and more health care providers have turned to reorganization and consolidation as a means of remaining viable. This article aims to inform readers of the risks associated with accepting assignment of a distressed health care provider's Medicare provider agreement, as well as providing suggestions for managing those risks.