Whether assisting clients with crafting responses to IRS audits or working with hospitals trying to meet the requirements of the oft-debated Patient Protection and Affordable Care Act, Douglas Mancino ’74 finds his practice in health care and federal tax law as invigorating as it was when he was a new graduate.
“I began practicing a couple of years after the Tax Reform Act of 1969 was enacted. There were massive changes affecting private foundations,” Mancino said, recalling work he did for Baker Hostetler’s Cleveland office to bring foundations into compliance. “Then you fast-forward to today, and we’re dealing with very significant changes in the Pension Protection Act of 2006, which affect public charities, and the Affordable Care Act of 2010.”
Changes within the health care industry, a sector bound to grow with the United States’ aging population, were among the reasons Hunton & Williams LLP hired Mancino in June to expand the health care practice of the firm’s Los Angeles office and nationally. Best Lawyers named him Los Angeles’ “Lawyer of the Year 2011” in health care earlier this year.
“There’s a ton of legal work being done to anticipate changes that will come in 2014,” Mancino said, referring to the Affordable Care Act.
His clients already are proceeding as if the Affordable Care Act will be upheld as constitutional, even though there are ongoing challenges. For example, those without clinical integration strategies in place are beginning to look at establishing their own.
A clinical integration strategy is an approach where physicians of all specialties and hospitals coordinate a patient’s care. In theory, the process eliminates duplication of tests and other procedures, in part, because a single electronic health record follows the patient.
Mancino said health care providers and hospital administrators realize the value of clinical integration. However, some are scrambling to find ways to raise the capital needed to transform it from theory to practice.
“I’m not sure the cost will be justified in terms of cost-savings alone. I think the cost will be justified in terms of better patient outcomes, though,” Mancino said. “It may cost more to maintain an electronic record, but I guarantee you that you won’t have to go from office to office with that little manila envelope. It does result in better care.”
Many of his clients also are trying to qualify for $3.8 billion available to form Consumer Operated and Oriented Plans, or CO-OPs, also called for under the Affordable Care Act. The provision would allow for the creation of nonprofit health insurance issuers to offer competitive health care plans for individuals and small groups.
“There will be anywhere from 50 to 100 new insurance companies funded with those monies,” Mancino said.
In the race to form Accountable Care Organizations – conglomerations of doctors and hospitals that provide quality care to Medicare beneficiaries at a low cost in exchange for financial incentives – Mancino said health care lawyers are delving into a lot of antitrust and tax work.
“I think there’s going to be further consolidation,” he said of changes to come as a result of the Affordable Care Act. “There are still a lot of freestanding community hospitals. With changes in the Medicare cost structure, they may find themselves unable to raise capital to expand on their own, and they will be looking for more capital-rich partners.”
Mancino worked on a number of hospital consolidation deals in the 1980s, after Congress mandated a Prospective Payment System in 1983 as a way to control costs for Medicare patients. Hospitals received a flat rate per case for inpatient care so that efficient facilities were rewarded accordingly, and inefficient hospitals had the incentive to become more efficient. Multihospital systems had not become commonplace until then, Mancino said.
Consolidation done properly, he believes, can be good for consumers.
“You eliminate overhead. You improve access to capital, and all of that means better care could be delivered, hopefully, at a lower cost,” he said. “The quality of the hospital often improves due to new technology or rebuilding a facility to meet design and utility needs that can attract exceptional health professionals.”
Mancino is working on a book due out this year tentatively titled A Comprehensive Guide to the Intermediate Sanctions Rules in Section 4958 of the Internal Revenue Code for Public Charities, Social Welfare Organizations and CO-OP Health Insurance Companies. It will provide a broad treatment of the rule guidelines that affect an organization and its managers.
He has authored more than 85 articles and book chapters covering tax-exempt organizations and health care issues. Mancino also has written or coauthored six other books, covering a spectrum of tax-exempt organizations. Taxation of Hospitals and Health Care Organizations for example, covers rules for charitable hospitals, HMOs and medical groups.
The process of explaining complex subjects to clients goes smoother after going through the process of writing it, Mancino maintains.
“If you like to write, the better you get, and the easier it becomes,” he said. “I like to explore new topics that potentially bring added benefit to my clients, but I just simply enjoy the process of writing ever since I was an associate editor on law review.
“It keeps you relevant,” the 62-year-old said, “Even if the process of updating my books is sometimes painful, it keeps me extremely up-to-date in my ability to serve clients and reinforces my leadership and expertise in the field. I’m going to be doing this a lot longer. I enjoy the work and the people I’m doing it with.”
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