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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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Kris Kemp Discusses Rep and Warranties Insurance in M&A Transactions

Nashville Business Journal


January 31, 2018

In an article published online by the Nashville Business Journal, Bass, Berry & Sims attorney Kris Kemp provided insight on the most significant trend affecting mergers and acquisitions: representations and warranties insurance (RWI). RWI is being used to fund indemnification obligations that were historically only funded by the seller. Valuation multiples are at an all-time high, rendering favorable legal terms for sellers like lower escrows and indemnification limitations. "This pro-seller environment is forcing buyers to look to alternative funding sources in the event that otherwise indemnifiable losses arise after a transaction is completed," explained Kris. 

Private equity transactions have played a role in the rise of RWI, as transferring risk to the insurance carrier avoids post-closing conflicts as the company is operated. Private equity funds that sell their portfolio also benefit because RWI enables the funds to distribute sales proceeds to investors quickly because that money is not tied up in escrow. 

RWI is also having a significant impact on the health care market. "Insurance carriers have now created underwriting teams exclusively focused on health care transactions, permitting them to offer health care coverage riders at reasonable premiums," noted Kris. 

If pursuing a claim against an insurance carrier is no more difficult than an indemnification claim against a seller, then M&A players should expect to see RWI used, or at least brought up, in the majority of M&A transactions.

The full article, "New M&A Trend: More Reps and Warranties Insurance," was published online by the Nashville Business Journal on January 26, 2018, and is available online.

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