Real Estate Financing in the Healthcare Space: Keep Your Eye on the Ball

Merle M. DeLancey Jr. and Ryan C. Craig*

Over the past couple of months, there have been two important developments that could affect a lender’s decision whether to finance real estate transactions involving entities and individuals in the healthcare field.

Advisory Opinion No. 19-05 (Purchasing Real Estate from an Excluded Party)

In September 2019, the Department of Health and Human Services Office of Inspector General (“HHS OIG” or “OIG”) issued an advisory opinion regarding the proposed purchase of real estate from a company owned and managed, in part, by an excluded individual. The Proposed Arrangement involved a community health center that receives Federal grant funding and owns and operates community health centers enrolled in the Medicare program (“Health Center”). The Health Center sought to purchase the real estate on which one of its community health centers is located. The Company from which the Health Center sought to purchase the property is owned and managed, in part, by an individual who was excluded from participation in all Federal healthcare programs by HHS OIG (“Excluded Person”). Continue reading “Real Estate Financing in the Healthcare Space: Keep Your Eye on the Ball”