Navigating Due Diligence in Health Care Transactions: Sensitive Information and Pitfalls
Amy Joseph, Sandi Krul, and Ben Durie
Acritical element of any merger, acquisition, or other joint venture, regardless of industry, is due diligence. However, navigating the due diligence process in the course of a contemplated health care transaction can include potential pitfalls for the unwary that are unique to health care, including those stemming from patient privacy requirements, compliance with complex fraud and abuse laws, and heighted antitrust attention to health care transactions. Inherently, there is some tension between operational and legal issues prior to closing a transaction. The inclination from an operational perspective may be to share more information to facilitate a smoother transition post-close, but for legal reasons the sharing of sensitive information needs to be restricted, particularly in health care transactions. This article provides an overview of the considerations to keep in mind with respect to sharing sensitive information and related issues in the health care transaction due diligence process.
Patient Privacy Considerations
The parties to a health care transaction must be cognizant of restrictions on sharing patient information during due diligence, because federal and state laws strictly govern the circumstances under which such information can be used or disclosed.