The health care industry is one of the most regulated industries with extensive federal and state governmental oversight. For instance, the industry is largely financed by monies paid under the Medicaid and Medicare programs, which require health care facilities receiving these monies to submit cost reports to federal and state governments that substantiate the monies received.
In this age of pre-packaged, pre-negotiated, and chapter 11 liquidation cases filed to effectuate a sale, it is becoming increasingly rare to work on chapter 11 cases that are filed without a clear exit strategy, much less one where the debtor is able to successfully reorganize. In New Jersey, recent hospital bankruptcies such as Passaic Beth Israel, Pascack Valley, Barnert and Bayonne all ended in closures and/or sales. However, St.
Almost two years ago, the financial markets collapsed and big banks came running to the government for a bailout. Public opinion held that an era of irresponsible lending and unquestioned growth in the U.S. housing market precipitated the economic downfall of late 2008, just as Barack Obama was campaigning to become our next president. Now, as many citizens blame Wall Street’s largest financial institutions for gambling at the expense of the general public, the current administration has elected to make a few bets of its own in the name of health care reform.
In In re Karykeion, currently pending in the U.S. Bankruptcy Court for the Central District of California, the court recently reviewed the application of § 1113 of the Bankruptcy Code in the context of the liquidation of a chapter 11 debtor that had been operating two acute care hospitals. Keeping in mind that many hospitals are unionized, the Karykeion case presents interesting issues as it evaluates what a debtor must do when liquidating to satisfy § 1113 when a buyer is seeking to acquire a hospital without its collective bargaining agreement (CBA).
The crash in the residential housing market has effected many Americans, but the downturn has had a particularly disruptive effect on many senior citizens, especially those seeking to gain admission to, or currently living in, continuing-care retirement communities (CCRC). CCRCs are a sub-segment of the senior-living market that provide a broad spectrum of housing, social, wellness and health care options to seniors. Most CCRCs are nonprofit entities and often affiliated with churches, fraternal or charitable organizations.
The Patient Protection and Affordable Care Act (PPACA), passed by the Senate on Dec. 24, 2009, and signed into law by President Barack Obama on March 23, 2010, is the basis for the U.S’s current experiment in health care reform. A copy of the section-by-section analysis of the PPACA, as it was enacted and prepared for the Senate, can be accessed by clicking here.
The proposals for comprehensive health care reform currently being considered by the U.S. Congress are extensive. Comprehensive reform will likely cost between $800 billion and $900 billion. To pay for this undertaking, Congress is fundamentally restructuring tax policy, provider payments and insurance markets.
Following a year of extreme economic turmoil, lawmakers in Washington have turned their attention to the reform of an industry that the Wall Street Journal called “one of the brightest spots in an otherwise gloomy economy”—the health care industry. For months, lawmakers have been busy debating the value of health care reform and the need to implement changes that will extend coverage to uninsured Americans.
Long-term care facilities continue to be battered by a barrage of financial challenges, and there seems to be no end in sight. Most recently and at the forefront in today’s news is the impact of the proposed health care reform on long-term care facilities. In the best-case scenario, long-term care facilities are facing further reductions in cost-of-living increases after receiving a pittance of the federal bailout funds given to states for funding Medicare.
The addition of §333 to the Bankruptcy Code as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)generated significant controversy because it mandates the appointment of a patient care ombudsman (PCO) if the debtor is a health care business, unless the court finds that “the appointment of such ombudsman is not necessary for the protection of patients under the specific facts of the case.” The major criticisms of §333 have been (1) the ambiguity surrounding the requirements of §333, (2) how to define and measure quality during bankruptcy and (3) the