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Two Georgia hospitals on Wednesday were hit with federal financial penalties for failing to disclose their prices, marking the first such enforcement action taken under federal rules that have met with uneven compliance since taking effect in January 2021, the Wall Street Journal reported. The Centers for Medicare and Medicaid Services (CMS), which is responsible for enforcing the rules, levied fines on Northside Hospital Atlanta and Northside Hospital Cherokee. The two hospitals, which are owned by Northside Hospital, together face penalties totaling roughly $1.1 million. The fines are the first to be issued. Research has shown that thousands of U.S. hospitals remained out of compliance months after the rules took effect. Only 6% of more than 5,200 U.S. hospitals displayed both of the two required price lists when the hospitals’ websites were evaluated between July and September 2021, according to an analysis of hospital transparency compliance published this month in the Journal of the American Medical Association.

Bankrupt pharmaceutical company Mallinckrodt Plc will seek expedited approval to raise $650 million in debt to finance its exit from chapter 11, replacing a $900 million loan that fell through amid market volatility, Reuters reported. Mallinckrodt's reorganization plan was approved in February in Delaware bankruptcy court, but the company remains in chapter 11 as it finalizes agreements and works to secure exit funding. Anupama Yerramalli, an attorney for Mallinckrodt from Latham & Watkins, said in court on Monday that the company will seek approval for the new exit financing on Wednesday. The new exit financing will be funded largely by the company's existing bondholders after the earlier-planned loan failed to generate sufficient market interest from debt investors. Bankruptcy Judge John Dorsey said that he would consider the request, but would give other parties time to object to the fast-track schedule before Wednesday. Andrew Rosenberg of Paul, Weiss, Rifkind, Wharton & Garrison, an attorney for bondholders who will provide additional financing, urged the court to move quickly, given the volatile market conditions that disrupted the initial $900 million loan and could still imperil the new financing. Mallinckrodt did not immediately respond to a request for comment on its exit from chapter 11. The Ireland-based company makes generic drugs, including opioids, and branded drugs including Acthar Gel, which is used to treat multiple sclerosis and infantile spasms. It filed for chapter 11 protection in 2020 in the face of opioid-related lawsuits and a court battle over Medicaid rebates for Acthar, its top-selling drug. The company's reorganization plan includes a $1.7 billion settlement to resolve thousands of lawsuits accusing it of deceptively marketing its opioids. The plan allows Mallinckrodt to reduce $5.3 billion in debt by $1.3 billion and hands control of the reorganized company to creditors.

Drugmaker Mallinckrodt PLC has obtained support among unsecured bondholders to fund its exit from chapter 11 after a chilly reception from the leveraged credit market, WSJ Pro Bankruptcy reported. The Ireland-based company had been struggling to complete a financing deal needed to emerge from bankruptcy and has been working with Morgan Stanley to find investors. A $900 million loan deal failed to gain traction with market participants, partly due to concerns about investing in a company linked to opioid production amid growing market sensitivity about environmental, social and governance issues. Mallinckrodt has since downsized the deal offering to $650 million and shifted its structure into a bond, rather than a loan, in the hopes of finding hedge funds that might have an easier time investing. The company has secured commitments for the deal from a group of existing creditors. The deal struggles follow a broader selloff in the leveraged credit market in recent weeks that has brought junk-rated bonds and loans under pressure, and pushed at least one company, Dayco Products LLC, to pull a refinancing deal. A nearly $3.3 billion bond issued by Carvana Co., the online used-car dealer, with help from Apollo Global Management Inc. has traded down substantially since. Mallinckrodt has been working to emerge from bankruptcy under a negotiated restructuring to trim roughly $1.3 billion in debt from its balance sheet. The company filed for chapter 11 protection in 2020 to address ballooning liabilities related to its production of opioids and antitrust claims around its flagship H.P. Acthar gel product.

Attorneys for the state of West Virginia and two remaining pharmaceutical manufacturers have reached a tentative $161.5 million settlement just as closing arguments were set to begin in a seven-week trial over the opioid epidemic, Attorney General Patrick Morrisey said yesterday. Morrisey announced the development in court in the state’s lawsuit against Teva Pharmaceuticals Inc., AbbVie’s Allergan and their family of companies. The judge agreed to put the trial on hold to give the parties the opportunity to reach a full settlement agreement in the upcoming weeks. “We are very optimistic that we can do so,” Morrisey said. The trial started on April 4. The lawsuit accused the defendants of downplaying the risks of addiction associated with opioid use while overstating the benefits. Under the tentative deal, West Virginia would receive more than $134.5 million in cash, while Teva would supply the state with $27 million worth of Narcan, a medication that can reverse opioid overdoses, restore breathing and bringing someone back to consciousness. West Virginia had reached a $99 million settlement with drugmaker Johnson & Johnson’s subsidiary Janssen Pharmaceuticals Inc. last month over the drugmaker’s role in perpetuating the opioid crisis in the state that has long led the nation in drug overdose deaths.

A Florida doctor and a former sales representative at Insys Therapeutics Inc. have been convicted of conspiring to pay and receive $278,000 in kickbacks and bribes in exchange for prescribing the drugmaker's addictive fentanyl spray. A federal jury in Tampa, Florida, on Tuesday found Dr. Steven Chun and Daniel Tondre guilty of conspiracy and kickback charges in the latest trial to result from a scandal that led to Insys' 2019 bankruptcy and the conviction of top executives. The two are among more than 40 doctors and former executives and employees of now-defunct Chandler, Arizona-based Insys who have faced charges over a scheme centered on Subsys, an opioid medication approved for treating severe pain in cancer patients. Prosecutors said Insys, before filing for bankruptcy in 2019, paid doctors kickbacks by arranging for them to participate in "sham" speaker programs ostensibly meant to educate medical professionals about Subsys. Over the course of a 10-day trial, prosecutors said they presented evidence that Chun received more than $278,000 in illegal kickbacks and bribes from Insys in connection with sham speaker programs that Tondre helped arrange.

A Texas-based senior living center, Christian Care Centers Inc., filed for bankruptcy on Monday with a lead bid for its assets from Boncrest Resource Group Inc., a non-profit that provides healthcare and assisted living services, Reuters reported. Christian Care Centers, a faith-based non-profit, which was established in 1947, filed its chapter 11 case in the U.S. Bankruptcy Court for the Northern District of Texas. Christian Care Centers reported about $65 million in debt and is one of several senior living or skilled nursing facilities to seek bankruptcy protection since the onslaught of the COVID-19 pandemic. Boncrest has offered $44.25 million for the assets. “We are grateful to have found a buyer who shares our long-term commitment and values,” CEO Sabrina Porter said in a statement on Monday. Christian Care Centers has three campuses in North Texas that provide a combined 412 independent living units, 152 assisted living units, 77 memory care units and 119 skilled nursing units, according to a written declaration from chief restructuring officer Mark Shapiro. The company was already facing financial strain in 2018 and 2019, according to Shapiro. The pandemic exacerbated the issue as labor costs increased and residency rates declined, leaving the company unable to make debt payments. Christian Care Centers has about $85,000 in cash on hand, according to court papers. It received a $4.5 million loan under the Paycheck Protection Program in May 2020, which was forgiven in June 2021.

Declining enrollment and higher labor and supply costs have forced 327 nursing homes to shut down since 2020, and more than 400, or about 3% of certified homes in the U.S., are at risk of closing this year, according to the American Health Care Association, an industry lobbying group, Bloomberg News reported. “The industry itself is on the brink of collapse,” said David Gordon, who leads the distressed health care practice at law firm Polsinelli. The coming upheaval will also weigh on the so-called sandwich generation, those squeezed between caring for their children and aging parents, often while juggling their own careers. More than half of adults over 65 will need care for serious disabilities, according to a government report, and the U.S. Census Bureau expects that older adults will outnumber children by 2034 for the first time ever. The median occupancy rate at skilled nursing facilities, historically around 90%, is forecasted to be 77% for the year, according to a March report from AHCA. And most homes are losing money, with an expected median operating margin of negative 4.8%.

Endo International PLC has started negotiations with its lenders and senior bondholders about a possible restructuring of more than $8 billion in debt as the drugmaker faces litigation over opioid sales, WSJ Pro Bankruptcy reported. Lenders initiated the discussions after the pharmaceutical company reported a sharp drop in quarterly earnings earlier this month stemming from the loss of exclusive rights over a key drug. Endo, which faces about 3,500 lawsuits from state and local governments and healthcare providers over claims that it helped fuel the opioid addiction epidemic, has been warning of the risk of a bankruptcy filing in its regulatory disclosures since last year. Gibson, Dunn & Crutcher LLP, a law firm representing the lenders, has entered confidential discussions with the company, although the lenders haven’t yet signed confidentiality agreements to be able to view proprietary information. The company, which has reached settlements with a handful of state and local governments over opioid liabilities, faces thousands more lawsuits it hasn’t resolved. Endo, which is domiciled in Ireland following a 2014 corporate tax inversion and has operations in Malvern, Pa., this month reported a drop in first-quarter earnings that pushed down the prices on its loans and bonds.