Mergers and acquisitions: director and consultant liability exposure

Corporate directors and their consultants must make decisions in an uncertain and changing health care environment. The losses each may face as a result of an incomplete analysis of the true value of the entities involved in mergers or acquisitions may extend beyond the failure of the transaction to the creation of personal liability as well. Accordingly, objective, careful, detailed, and fair decision-making based upon adequate information is more critical than ever for directors if they are to be able to take advantage of the business judgment rule, and also for consultants to avoid their own liability when transactions fail to deliver the values they have estimated.     

Special report on reimbursement. HCFA enacts new enforcement remedies covering nursing facilities

While the regulations are revolutionary in their use of "substantial compliance," the interpretation and application of HCFA's new remedial scheme are still uncertain, as states are given broad discretion in defining important terms and in applying and interpreting the criteria to select remedies. Further complicating the issue is the fact that some states, including California, intend to seek waivers from HCFA to substitute their own state enforcement systems for most, if not all, of the new federal system. Based upon these uncertainties, the enforcement of nursing facility standards will likely be in a state of flux for some time to come.     

The HIV-infected health care provider. Doe v. Attorney General of the United States

Doe demonstrates that once an employer enters into a relationship with an individual and thereafter determines that he or she may be disabled, the employer has the right to ask the individual questions about the possible disability when those questions are relevant to assessing his or her qualifications for continuing on the job. In fact, once a health care provider is on notice that an employee's or physician's disability may render the employee or physician no longer qualified, thereby potentially endangering patients, the provider is required to determine whether the person is qualified for the job. In these sensitive matters, employers must draw a fine line between unreasonably following up on every rumor on the one hand, and on the other hand investigating reliable information when there may indeed be a direct threat to patients.