West Palm Beach partner James A. Farrell, Chair of Shutts & Bowen LLP’s health care practice group and former hospital executive and general counsel, recently provided his insights to The American Lawyer, in their latest piece discussing the forecast for the health care sector in 2021.
According to the article, health care practice leaders anticipate that 2021 will be a year full of M&A deals and consolidation, as well as insolvency for beleaguered sectors like rural hospitals and skilled nursing. Likewise, the sector should anticipate more clarity in the industry thanks to the COVID-19 vaccine and the new administration’s pandemic response. Contributing to the commentary from various health care industry leaders, Jim noted a drop-off in M&A activity in 2020.
“[M&A] started to come back to life in late September and October, but we can’t get any of [those deals] closed,” Jim said. “Between issues with the [Paycheck Protection Program] loans, the CARES Act and provider relief obligations, buyers have concerns as far as volume coming back. They’re understandably concerned about a second or third wave, too, and how that may impact things.”
A notable exception is risk-based providers, which had a banner year because of people not using health care services in 2020, he stated. He also added that “consolidation and private equity interest in health care, while somewhat paused, by no means has abated. It could be a busy 2021.”
In addition, providers that received money from the CARES Act and PPP loans will look to law firms for advice on compliance and the tax implications of repayment. Jim expressed that providers will need advice on how to treat revenue they’ve been given and instructed to use by June 2021.
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About James A. Farrell
James A. Farrell is a partner in the West Palm Beach office of Shutts & Bowen LLP, where he is the Chair of the Health Care Practice Group. Jim is Florida Bar Board Certified in Health Law. A Martindale-Hubbell AV® rated attorney, he's been named among the Best Lawyers in America® in Health Law since 2006 and has been recognized by Florida Super Lawyers in Health Law since 2006. A former hospital executive and general counsel, Jim specializes in healthcare mergers and acquisitions, managed care and joint venture development.