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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Thought Leadership

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Thought Leadership Spotlight

Healthcare Transactions: Year in Review 2018Last year, CVS Health Corp. (NYSE: CVS) announced it would purchase health insurer Aetna Inc. (NYSE: AET) for $67.5 billion, a transaction that would be one of the biggest healthcare mergers in the past decade. The transaction raises an intriguing question: is this the beginning of a transformational shift in healthcare?

Recently, members of our healthcare group authored the Healthcare Transactions: Year in Review outlining 2017 M&A activity and drivers in the following hot healthcare sectors:

• Managed Care
• Hospitals
• Post-Acute Care—Home Health & Hospice
• Ambulatory Surgery Centers (ASCs)
• Healthcare Information Technology (HIT)
• Behavioral Health
• Physician Practice Management

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Section 409A Transition Relief Ends December 31, 2012

Publications

October 19, 2012

Companies should review their existing severance arrangements, change in control arrangements, employment agreements and other nonqualified deferred compensation arrangements to determine if a correction is required under Section 409A of the Internal Revenue Code. 

In 2010, the Internal Revenue Service (IRS) issued Notice 2010-6 which provided a correction program for certain document failures under Section 409A. While this was welcome guidance for practitioners, the IRS unfortunately took an unexpected position regarding the interaction between the payment of severance pay (and other nonqualified deferred compensation) and the executive's related execution of a release of claims. The IRS' position is that commencement of the payment of severance pay (and other nonqualified deferred compensation) cannot be conditioned upon the executive's return of a release. As a result, a common provision in many arrangements which provides that the executive's severance pay will commence within a period following the executive's termination date (e.g., 60 days), but not before the executive has executed a release of claims, would result in a document failure under Section 409A. 

Unfortunately, this guidance was provided following most companies' review and revision of their existing arrangements for final regulations under Section 409A. As a result, arrangements which already were amended for Section 409A may need to be reviewed again to ensure this language is corrected. The IRS provided an extended transition period for companies to correct their arrangements, which is set to expire on December 31, 2012. As a result, companies should act quickly to inventory their existing arrangements and ensure that the relevant provisions are amended or to determine that such arrangements meet an exception from Section 409A. Additionally, companies that terminated employees this year or are contemplating terminating an employee should reach out to counsel to ensure that all corrective measures are taken to avoid an unintended Section 409A violation.


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