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Committee Webinar - Navigating Health Care Bankruptcies to Maxamize Creditor Recoveries

The panelists for this webinar will discuss the various types of health care cases and the competing interests that arise from a number of perspectives, including debtor, creditor, and provider-side interests. The panel will provide an overview of the uniqueness of bankruptcy health care cases and identify proven strategies to assist practitioners to guide unsecured creditors through these difficult and often complex reorganizations.

HIPAA and Reorganization and Sales in Health Care Bankruptcies

As any bankruptcy practitioner knows, laws other than the provisions of the Bankruptcy Code can significantly impact a debtor’s reorganization. Indeed, bankruptcy trustees and debtors-in-possession must conduct the debtor’s operations in accordance with applicable nonbankruptcy law.[1] It should come as no surprise, therefore, that laws regulating health care providers and insurers can significantly impact the reorganization of health care debtors.

Debt Rendered Nondischargeable Because Debtor Kept the Insurance Checks

Many Americans lack health insurance.[1] Even people with health insurance may seek care from out-of-network hospitals that don’t participate in their health plans.[2] That is what happened with the debtor in In re Dietrich, because “his health insurance carrier would not pay the Hospital directly”[3] and instead paid the debtor the cost of his hospital bills.[4] After receiving the mone

Asset-Purchase Issues with Health Care Businesses: A Complicated Cure for Economic Illness?

Health care businesses are seeking bankruptcy relief in increasing numbers.[1] Often, company assets are sold pursuant to § 363 of the Bankruptcy Code.[2] Such sales benefit not only the debtor’s creditors, but also the community — providing for the continuation of medical care, especially in rural areas where health care options are limited. Beyond the normal bankruptcy sale issues, many federal and state regulatory issues arise.

Bankruptcy Sales of Health Care Provider Assets Free and Clear of FCA Liabilities: Some Untested and Novel Arguments

[1]An asset sale is an important strategic option for hospitals and other health care facilities in financial distress. Whether pursuant to § 363 of the Bankruptcy Code or a confirmed reorganization plan under § 1123‌(b)‌(4), a sale in chapter 11 can offer great benefits, including the potential ability to sell assets free and clear of interests. When a hospital is faced with significant False Claims Act (FCA) liabilities, a sale to a new provider is often the only viable option to keep the hospital operating as a going concern.

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