%1

The rate of serious medical complications increased in hospitals after they were purchased by private equity investment firms, according to a major study of the effects of such acquisitions on patient care in recent years, the New York Times reported. The study, published in JAMA yesterday, found that, in the three years after a private equity fund bought a hospital, adverse events including surgical infections and bed sores rose by 25 percent among Medicare patients when compared with similar hospitals that were not bought by such investors. The researchers reported a nearly 38 percent increase in central line infections, a dangerous kind of infection that medical authorities say should never happen, and a 27 percent increase in falls by patients while staying in the hospital. Although the researchers found a significant rise in medical errors, they also saw a slight decrease (of nearly 5 percent) in the rate of patients who died during their hospital stay. The researchers believe other changes, like a shift toward healthier patients admitted to the hospitals, could explain that decline. And by 30 days after patients were discharged, there was no significant difference in the death rates between hospitals. Other researchers who reviewed the study said that while it didn’t provide a complete picture of private equity’s effects, it did raise important questions about the quality of care in hospitals that had been taken over by private equity owners.

Impel Pharmaceuticals Inc. announced yesterday that it is pursuing a sale of the company through an in-court restructuring process, and has filed voluntary petitions to commence chapter 11 proceedings to facilitate an orderly sale process, according to a company press release. The commercial-stage biopharmaceutical company has entered into a deal with JN BIDCO LLC to serve as the stalking-horse bidder for the firm and its assets. The filing in the U.S. Bankruptcy Court for the Northern District of Texas aims to get higher and better offers from interested parties. Impel seeks to complete the sale process in the first quarter of 2024, with any sale subject to court approval. According to the firm, the decision to file for chapter 11 protection follows the strategic review process that Impel announced in October 2023. During the review, the company had announced the exploration of a wide range of options including potential sale of assets of the company, a sale of all the company, a merger or other strategic transaction.

The largest skilled nursing facility in St. Louis has closed suddenly, forcing about 170 residents to be bused to other care centers. Many left with nothing but the clothes they were wearing, the Associated Press reported. The abrupt shutdown of Northview Village Nursing Home on Friday came after workers learned they might not be paid and walked out, confusing residents and their relatives. Many family members gathered through the day Saturday outside the facility on the city's north side. Some didn't immediately know where their loved ones were taken. The difficulties started Friday when, according to the union representing workers, more than 130 people went unpaid, and it became unclear if their checks would be forthcoming. Marvetta Harrison, a certified medical technician, said workers received emails from the company this weekend promising they’ll be paid, but it was unclear when. “This is real wrong,” Harrison said. “I have worked in that building for 37 years. Not only did they mistreat us, they mistreated the residents we take care of.” Northview Village has been fined 12 times for federal violations since March 2021, according to the Centers for Medicare and Medicaid Services. Fines totaled over $140,000 and ranged from $2,200 to more than $45,000. The federal agency gives Northview a one-star rating out of a possible five, but doesn’t spell out reasons for the fines.

The Consumer Financial Protection Bureau (CFPB) on Friday took action against a medical debt collector, Commonwealth Financial Systems, for illegally trying to collect unverified medical debts after consumers disputed the validity of the debts, according to a CFPB press release. Under the order issued on Friday, the company will cease operations and pay a $95,000 penalty to the CFPB’s victims relief fund. Commonwealth Financial Systems is a nonbank corporation with its principal place of business in Dickson City, Pennsylvania. Commonwealth is a third-party debt collector that specializes in the collection of past-due medical debts and furnishes information about consumer collection accounts to consumer reporting companies. Commonwealth’s actions violated the Fair Credit Reporting Act because the company failed to conduct reasonable investigations of disputed debts and failed to inform consumer reporting companies that certain information was being disputed. Commonwealth also violated the Fair Debt Collection Practices Act because it continued to attempt to collect disputed debts without substantiating documentation.

Madera hospital’s creditors want to be repaid through the bankruptcy process — including the hospital’s chief executive, the Fresno (Calif.) Bee reported. Last month, the hospital’s creditors submitted to a federal bankruptcy court their plan to liquidate the hospital, which, if approved by the court, would start the process of selling off the hospital assets to pay back millions owed to the creditors. Among the dozens of businesses, doctors and individuals who filed claims is Karen Paolinelli, Madera Community Hospital’s chief executive. Earlier this year, she filed a claim requesting payment for $200,658 in unpaid vacation time and unpaid self-funded insurance benefits. Paolinelli, who earns an annual salary of $359,668, according to the hospital’s latest available tax records, is a key player along with the hospital board of trustees in trying to find a partner to reopen the hospital, which ceased operations and closed its doors nearly a year ago. The hospital has just months to secure a reopening partner before creditors plan to vote on the liquidation plan in February. The liquidation plan filed by creditors allows for the hospital to pursue an agreement with a partner to reopen the hospital, subject to creditor and court approval.

Unpaid medical debt will no longer appear in New York residents’ credit reports under a bill signed into law by Gov. Kathy Hochul (D) yesterday, the Associated Press reported. The law prohibits credit agencies from collecting information about or reporting medical debt. The law also bans hospitals and health care providers in the state from reporting such debt to the agencies. New York is the second state after Colorado to enact such a law. A similar nationwide measure is being considered by the federal Consumer Financial Protection Bureau. The new law will take effect immediately. “No one should ever have to make a horrible choice between their physical health and their financial health,” Hochul said. The new law won't necessarily stop all medical debt from affecting New Yorkers' credit scores. It won’t apply to debt that is charged to a credit card, unless the card was issued specifically for health services, and it doesn't apply to out-of-state health care providers.

Air Methods, a helicopter ambulance business backed by a private-equity firm, received bankruptcy court approval for its restructuring plan to cut $1.7 billion of debt, WSJ Pro Bankruptcy reported. Under the plan approved by the U.S. Bankruptcy Court for the Southern District of Texas, Air Methods is expected to exit chapter 11 before the end of the year, according to a court filing yesterday. The Greenwood Village, Colo.-based company sought protection from creditors in October with a proposed restructuring agreement that would cut its debt load to roughly $550 million from $2.24 billion. Both secured lenders and unsecured bondholders will take a loss on their original investments. Creditors will also take some of the equity in the reorganized business. Air Methods provides more than 100,000 rides a year on its helicopters and airplanes. Private-equity firm American Securities bought it in 2017. The company was among a few healthcare providers that filed for bankruptcy this year, partly because of the fallout from the No Surprises Act that took effect last year to protect patients from surprise medical bills. Envision Healthcare and American Physician Partners were other companies that sought bankruptcy protection, citing the negative impact from the law.

The U.S. Securities and Exchange Commission said that Mallinckrodt failed to tell investors it had potentially overcharged Medicaid for its flagship drug, but the regulator waived a $40 million civil penalty partly because the pharmaceutical company agreed to hire a compliance consultant, the Wall Street Journal reported. The SEC said in an administrative proceeding Thursday that the Centers for Medicare and Medicaid Services informed Mallinckrodt as early as 2016 that the company was using an incorrect rebate rate for its sales of Acthar Gel, a drug used to treat several rare autoimmune diseases, which meant it was overcharging state Medicaid programs for the drug. Mallinckrodt, which didn’t admit or deny the SEC’s findings, agreed to hire a compliance consultant to conduct a comprehensive review of the company’s disclosure and internal accounting controls, as well as implement the consultant’s recommendations. The SEC said that it wouldn’t impose the $40 million penalty because of Mallinckrodt’s financial position and because it had committed to retain a consultant. The company in November announced it had completed its financial restructuring and emerged from chapter 11 bankruptcy.