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Nursing homes and debt collectors are billing and suing long-term-care residents’ family members and friends, demanding payments for debts these individuals don’t legally owe, consumer attorneys and federal regulators are claiming, MarketWatch.com reported. Some nursing-home admission agreements include provisions that attempt to make caregivers or other third parties personally liable for payments for the resident’s care, the Consumer Financial Protection Bureau said in a new report examining facilities’ debt collection practices. Under federal law, nursing homes participating in Medicare and Medicaid can’t make such provisions a condition of admission or continued stay in the facility. Yet some nursing homes hire debt collectors to collect residents’ unpaid bills — which can range into the hundreds of thousands of dollars — from third parties based on these invalid provisions, regulators said. The family members and friends subjected to these actions are often unaware of the law and don’t have the resources to respond to litigation, resulting in judgments against them. Some caregivers targeted for payments for a loved one’s care have had their wages garnished and even lost their homes, the CFPB said. When debt collectors attempt to collect invalid debts and give information on those debts to credit bureaus, they may violate federal debt-collection and credit-reporting laws, the CFPB and Centers for Medicare and Medicaid Services warned in a joint letter to nursing homes and debt collectors on Thursday. Medical debt “is a very big pain point across the board, and we are especially worried that medical debt on credit reports is often inaccurate,” CFPB director Rohit Chopra told MarketWatch in an interview Thursday. Speaking of the large numbers of nursing-home residents who died during the pandemic, he said, now their caregivers in some cases may be “subject to potentially illegal debt collection.” After age 65, more than a quarter of adults will need nursing-home care at some point, according to federal estimates. The median annual cost of a private room in a nursing home was over $100,000 in 2021, according to Genworth Financial, which provides long-term care insurance. Most adults don’t have long-term care insurance, and Medicare provides only limited coverage of nursing home care. For lower-income residents who exhaust their resources, Medicaid can pay for nursing home care, but the application process is often lengthy. Gaps in the various types of coverage can result in massive bills.

Blood flow imaging company Dynamic Light Inc. on Sept. 6 filed for chapter 7 bankruptcy in the U.S. Western District of Texas, Austin Business Journal reported. As opposed to a chapter 11 bankruptcy filing, which typically involves a company restructuring its operations and staying in business, a chapter 7 bankruptcy filing sets the table for a company's assets to be liquidated and its operations to cease. Dynamic Light was founded in 2018, and its mission is “to enable real-time blood flow imaging to improve patient care and lower health care costs,” according to its website. The startup's LinkedIn page shows that it has fewer than 10 employees, including six registered on the platform. The company, based in downtown Austin at 2025 Guadalupe St., reported having between $50,000 and $100,000 in assets against $1 million to $10 million in liabilities. Dynamic Light Board Chair Robert Teague signed the filing as an authorized representative of the company. Elizabeth Hoff is the company’s CEO, according to its website. Dynamic Light is being represented in bankruptcy by Stephen Sather of Barron and Newburger PC. “The board made a decision that it was in the best interest of the creditors to wind up the company at this time,” Sather said Sept. 8.

San Jorge Children’s Hospital in San Juan filed for chapter 11 protection on Sept. 1, WorldNationNews.com reported. The organization filed its voluntary bankruptcy petition in the Federal Bankruptcy Court in Old San Juan. The solicitation document signed by CEO Edward Smith indicates that the hospital’s debt is between $10 million and $50 million. Similarly, Momentum indicates that its main creditor is the Electric Power Authority, which has a registered debt of $3,062,880, and another $133,422. It indicated that the net assets are between $10 million and $50 million, while it has identified at least 243 creditors.

Bright Health Group told investors this month it needs to raise more capital over the next year, describing the move as a long-anticipated step for the fast-growing health insurer, the Minneapolis Star Tribune reported. But in regulatory filings this month, Bright Health delivered the same core message with greater urgency, saying that there's "substantial doubt" the company can continue as a going concern without raising more capital. The Bloomington, Minn.-based insurer has a history of operating losses including a net loss of $432 million during the first six months of 2022, it said in a report to Florida regulators about second quarter financial results. The losses, coupled with membership growth, mean the company had to set aside more reserve funds as required by insurance regulators, thereby reducing cash for running the business. "Based on our projected cash flows and absent any other action, Bright Health Group will require additional liquidity to meet its obligation as they come due in the 12 months following the date the statutory basis financial statements are issued," the company said in the mid-August filing. "These conditions raise substantial doubt about the company's ability to continue as a going concern." Founded in 2015, Bright Health sells health insurance coverage to individuals under age 65 through government-run health exchanges. It also runs Medicare Advantage health plans for seniors who opt to receive their government insurance benefits through private managed care companies. Beyond insurance, the company operates medical clinics and has touted how a partnership between its health plans and health care providers can deliver better quality for patients at a lower cost. As of June, Bright Health had about 970,000 individual market enrollees and 120,000 people in Medicare Advantage plans. An enrollment surge in 2021 complicated by COVID-19 issues made it difficult for the insurer to accurately calculate risk scores for enrollees. As a result, the company took a big revenue hit due to unexpected risk adjustment payments, where funds are transferred to insurers in the individual market that cover more people at risk of needing costly medical services.

Days before the money-losing opioid drug firm Endo International filed for bankruptcy last week, the company paid chief executive Blaise Coleman an $11.85 million bonus, the Philadelphia Inquirer reported. It was, in fact, the latest installment of an eye-popping $55.5 million in pre-bankruptcy bonuses paid over 10 months to Coleman and three other top executives at the drug firm, which faces potentially huge legal liability for its part in the nation’s opioid epidemic. Endo manufactured and marketed hundreds of millions of branded Opana and generic opioid pain pills. Endo paid the first bonuses last November when it considered an earlier bankruptcy date. The firm drug paid a second round of bonuses right before the actual bankruptcy filing in Manhattan on Aug. 16, court and regulatory records show. Endo describes them as prepaid incentives and management retention. Pre-bankruptcy bonuses reward executives for failing enterprises, critics say. They aren’t scrutinized by the bankruptcy court or creditors, and they siphon money out of the funds available for the business, or settling debts.

Pharmaceutical giant Bausch Health Cos. has retained advisers to help it map out its future after the company lost a major patent dispute and has drawn controversy over the recent spinoff of its eye-care business, WSJ Pro Bankruptcy reported. Canada-based Bausch said yesterday that it hired law firm White & Case LLP and investment bank Houlihan Lokey Inc. to advise on strategic alternatives. Last month Bausch lost a legal dispute over a patent it holds on gastrointestinal tract drug Xifaxan, known as rifaximin, to treat irritable bowel syndrome. Losing the patent battle means Bausch will likely face competition from generics manufactured by companies like Morristown, N.J.-based Alvogen Inc. Bausch has already launched an appeal to the decision. “We expect that generic competition will enter the market no later than year-end 2024 — much earlier than our previous base-case assumption of January 2028,” S&P Global Ratings analysts wrote in a recent report after the ruling. They also estimated that Xifaxan contributes to about 50% of Bausch’s total pretax earnings. The potential revenue drop from Xifaxan adds additional pressure on the company as it faces an uproar from its creditors over the spinoff of its eye-care business, Bausch + Lomb Corp., which saw a limited initial public offering of shares this spring. Bausch pursued the spinoff at the behest of activist investors Carl Icahn and Glenview Capital Management. Unsecured creditors have hired law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to advise them on possible legal claims stemming from the spinoff, which they contend transferred value away from them, according to people familiar with the matter. They have already communicated their concerns about the spinoff to the company in writing. Secured creditors have separately brought on Gibson Dunn & Crutcher LLP for advice in relation to the spinoff. Without a patent for Xifaxan, losses may increase for holders of Bausch’s roughly $20 billion in debt. Franklin Templeton and JPMorgan Chase & Co. number among the company’s largest creditors, and the company carries $12 billion in unsecured bonds and $7.7 billion in secured debts, company filings show.

A judge has approved the third attempt to settle disputes among the founders and early investors in Relief Telemed, now known as Relief, paving the way for the early-stage health tech firm to emerge from bankruptcy proceedings, the Baton Rouge Business Report reported. Under the agreement, founding CEO Vishal Vasanji will pay $50,000 and give up his stock and any claims on the company’s technology and other intellectual property. Relief claims that Vasanji had misappropriated more than $200,000 in company funds for personal use, which he denies. The parties to the settlement are not admitting any liability. Relief voluntarily entered chapter 11 bankruptcy last year. Co-founders Vasanji and James Davis envisioned their on-demand care delivery platform as “the Waitr of health care.” Vasanji reported a surge in demand for the telemedicine platform as the pandemic raged in 2020 and further growth when the company got into COVID-19 testing for state clients such as LSU, though those prospects withered as the pandemic waned and there was less demand for testing.