JOAs in Healthcare: Regulatory Compliance, Maintaining Tax-Exempt Status in Virtual Merger Arrangements

This CLE course will prepare healthcare counsel to structure joint operating agreements (JOAs) that meet regulatory requirements. The panel will address key factors in maintaining the tax-exempt status of the hospital and healthcare systems involved in the virtual merger.

There is a resurgence in JOA transactions, or virtual mergers or other creative affiliations, along with an increase of consolidations and acquisitions in healthcare. JOAs allow two or more hospitals or healthcare systems to unify operations for cost efficiencies while retaining their separate identities and autonomy.

Counsel to hospitals and healthcare systems must carefully structure the JOA to meet regulatory requirements, including the federal Anti-Kickback Statute. Counsel must also keep in mind that such collaborations may face antitrust scrutiny.

Further, counsel also must be mindful of tax issues when structuring JOAs to avoid jeopardizing the tax-exempt status of the parties. The IRS will analyze the facts and circumstances, including a review of the new organization created by the JOA, to determine whether the entities will retain their tax-exempt status.

Listen as our authoritative panel of healthcare attorneys examines structuring JOAs to meet the regulatory requirements and addresses the tax issues to maintain tax-exempt status. The panel will offer best practices for JOA transactions.