Behavioral Health

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Behavioral Health and Substance Use Disorder Treatment

The need for behavioral health and substance use disorder (SUD) treatment services has risen significantly due to the COVID-19 pandemic. Numerous societal and economic factors have contributed to this rise, indicating that the increased demand will be sustained post-pandemic.  Such factors include broad-based and media driven efforts to decrease stigma attached to mental illness and substance use disorders, consumers’ growing comfort with, and even preference for, virtual care, an increased demand for evidence-based data that is in turn driving innovation, and employer initiatives and benefits aimed at prioritizing the mental health and wellness of their employees. 

One of the more logical synergies of the pandemic and healthcare deal making has been in the behavioral health/SUD space. The pandemic has compounded mental health needs but also highlighted the existing need that was there pre-pandemic. The increased availability of needed therapy, fueled by the Federal Parity law, payers’ increasing focus on care delivery and cost savings in this area, and investor interest has dovetailed with more effective and confidential means of treatment including telemedicine and VMAT (Virtual Medicated Assisted Treatment) for SUD.

Foley’s Health Care attorneys advise Behavioral Health/SUD companies, including telehealth and telepsychiatry, and their investors and lenders in mergers and acquisitions, recapitalizations, buyouts and restructurings as well as advising on a broad range of commercial arrangements. We also bring a unique blend of deep regulatory as well as corporate and finance experience to Behavioral Health/SUD transactions as a result of our significant experience in health and life science deals, both domestic and international.

Behavioral Health/SUD Transactions

As lead counsel, we oversee all aspects of the transaction. A fully integrated team delivers a holistic solution to maximize deal value and mitigate risk. We provide a cost-effective, business-focused and results-oriented approach to M&A deals, ensuring that our services match your strategic business goals, strengthen your organizations’ effectiveness, and expand your platform reach.

Telemedicine and Digital Health

Foley has the market-leading Telemedicine and Digital Health team to help our clients navigate emerging issues in telehealth, telepsychiatry, and VMAT enabling them to provide innovative care for patients in new markets around the block and around the world. By taking advantage of technological advances, our behavioral health and SUD clients have the chance be at the forefront of health care delivery by expanding service offerings and sharing their insight with patients independent of geography. With this opportunity comes challenges, as the laws and regulations struggle to keep up with the pace of innovation. It is critical to consult with a legal services provider with the experience and resources to help you grow your business while managing the evolving issues. Our attorneys have the experience necessary to assist with telehealth program assessment, development, and implementation, hotlines and call centers, and multi-state, web-based health care tools and services. We also are well positioned to provide counsel on operational issues, including payer credentialing, patient verification, and medical record management.

Transactional Due Diligence

Whether deal counsel or providing regulatory guidance, Foley delivers a comprehensive due diligence analysis providing professional guidance to uncover any risk associated with any potential acquisition, including corporate practice of medicine, Stark, state and federal anti-kickback statutes, antitrust compliance, state licensing requirements related to behavioral health/SUD treatment facilities and modalities, and state surveys.

Health Care Regulatory Compliance

Foley has the unique ability to manage compliance issues for behavioral health/SUD providers. We help navigate the issues that are unique to these organizations and work with your team to ensure compliance with the ever-changing complex federal and state regulations covering Medicare and Medicaid, False Claims Act and fraud and abuse, payment and reimbursement, licensure, accreditation and certification, HIPAA privacy and confidentiality and more.

Representative Transactions

  • Foley represented Magellan Health, Inc., a leader in managing complex, high-cost health care, in the acquisition of a 70 percent interest in Bayless Integrated Healthcare, a leading integrated outpatient behavioral health and primary care provider in Arizona. Magellan Health is a leader in managing the fastest growing, most complex areas of health, including special populations, complete pharmacy benefits and other specialty areas of health care. Its customers include health plans and other managed care organizations, employers, labor unions, various military and governmental agencies and third-party administrators.
  • Foley also represented Magellan Health, Inc. in a minority equity investment into Kaden Health, Inc., the New York-based digital behavioral health company.
  • Foley represented InSight Telepsychiatry in its merger with Regroup Telehealth, creating the nation’s and most comprehensive telepsychiatry service provider in the United States, specifically with regard to the combined revenue, national footprint, diversity of client types, and diversity and quantity of their provider base. The combination will allow for increased delivery of mental health services across the country in response to a nationwide shortage of specialists coupled with a rising need for behavioral health services.
  • Foley represented Apara Autism Centers, a portfolio company of private equity firm Havencrest Capital Management, in its acquisition of Behavior Pioneers, a clinic- and home-based provider of Applied Behavior Analysis (ABA) therapy services treating children with Autism Spectrum Disorder (ASD).
  • Representation of joint venture in connection with formation and operation of intensive outpatient/medication assisted treatment facilities in numerous states.
  • Joint representation of two health systems in connection with affiliation with PE-backed psychiatric hospital management company, to develop and operate a new inpatient psychiatric hospital.

Representative Telehealth Matters

  • Telehealth-Based Substance Use Disorder Treatment. Foley helped an emerging digital health company involved in the treatment of opioid use. The advice included determining substance use disorder licensing requirements, controlled substance prescribing limitations, and nurse practitioner scope of practice, supervision requirements, and prescribing authority across multiple states. The work helped the company strategically determine potential market entry points for successful launch. 
  • Foley provides strategic business and legal counsel to many leading telehealth providers that has encompassed advice on corporate/M&A mandates and multiple capital raises as well as advising on the full scope of legal and regulatory issues. It was recently announced that riding a wave of pandemic-fueled momentum for virtual care, Cigna announced its subsidiary Evernorth is acquiring telehealth provider MDLive, reflecting the increasingly growing virtual care landscape.
  • Foley developed a national regulatory strategy and corporate structure for a telepsychiatry client as it relates to federal and state telemedicine and corporate practice rules, patient consent, and other regulatory matters for this telepsychiatry client.
  • Served as legal advisor to InnovaTel Telepsychiatry, a provider of virtual mental health care with differentiated expertise in treating complex conditions, in its acquisition by Quartet Health, a tech-enabled mental health care company that works with health plans, systems, and provider groups to deliver speed to quality care for all. The acquisition of InnovaTel will help Quartet develop market-leading care delivery capabilities to complement its existing ecosystem of high-performing clinicians who practice in-network on behalf of health insurance plans. InnovaTel will also expand its reach to serve members of health plans and systems nationwide through this partnership.
  • Represented Eagle Valley Behavioral Health, an outreach of Vail Health, in obtaining a Full Designation as a Community Mental Health Center (CMHC) from the Colorado Department of Health, Office of Behavioral Health, becoming only the 18th CMHC in Colorado and the first since 1989.