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Pummeled by the pandemic, at least 40% of rural U.S. hospitals are in danger of shutting down and leaving millions of people in smaller and less affluent communities without a nearby emergency and critical care facility, Bloomberg News reported. That’s the conclusion of the Center for Healthcare Quality and Payment Reform, whose recent study sees 500 hospitals at immediate risk for closing within two years and more than 300 others at high risk within five years. The grim assessment by the policy center found the problems spread across the country, and that the threats will persist even if the pandemic ends because rising costs are outrunning revenue. All told, there are about 38 million Americans in the at-risk areas; they’d have to drive at least 20 minutes farther if their local hospitals close, with half adding at least 30 minutes, said Harold Miller, the center’s chief executive and author of the report. Many of the facilities are in sparsely populated but important farming, mining or ranching communities. Fifteen states have more than half of their rural hospitals at risk of closing because of persistent losses, including Texas and a large swath of the South and Midwest such as Kansas and Mississippi, the study shows. But rural hospitals in New York, Connecticut and Washington State are also in trouble.

The House passed a sweeping $1.5 trillion omnibus spending package on Wednesday night to fund the government, hours after lawmakers scrapped billions in funding to combat the COVID-19 pandemic amid resistance from Democrats upset about plans to yank already allocated relief from states, The Hill reported. The last-minute revolt over the COVID-19 funding from Democrats angered over a GOP-demanded offset upended a delicately negotiated package between congressional leaders of both parties. As part of those bipartisan negotiations, the House passage of the omnibus package, which funds the federal government through September, was split in two votes so that lawmakers could register specific support for the defense spending portions. The House first voted 361-69 to back funding for the Pentagon, Department of Homeland Security and other national security priorities and then 260-171, with one Democrat voting "present," to adopt the provisions largely related to domestic programs. Congress faces a time crunch to get the legislation to President Biden for his signature since current federal funding expires this Friday. Lawmakers also passed a stopgap measure by voice vote that lasts until Tuesday to ensure that the Senate has enough time to clear the omnibus package without risking a government shutdown. The omnibus package includes about $14 billion in emergency funding to boost humanitarian, security and economic assistance for Ukraine and central European allies in response to the Russian invasion — as lawmakers on both sides of the push for more support to Ukraine.

A bankruptcy judge authorized Jones Day to continue representing Johnson & Johnson’s talc subsidiary in chapter 11, rejecting arguments that the law firm can’t be trusted to look out for the interests of cancer victims because it designed the strategy to limit J&J’s liability, the Wall Street Journal reported. Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., said on Tuesday that Jones Day’s past work for J&J on a transaction that sent its talc-related liabilities into chapter 11 doesn’t mean the firm has a disqualifying conflict of interest, as injury lawyers allege. Judge Kaplan said that Jones Day’s work for J&J, which ended two days before the recently-formed talc subsidiary filed chapter 11 in October, doesn’t mean the law firm will favor the interests of the parent company over its bankrupt unit, LTL Management LLC. Instead, the judge said evidence shows that LTL and J&J have a shared interest in settling the talc liability in chapter 11. That fact ensures that neither Jones Day nor LTL could give priority to a competing interest favoring J&J that could influence the bankruptcy case, Judge Kaplan said.

More than 50 years ago, nearly a dozen men incarcerated outside of Philadelphia enrolled in an experiment funded by Johnson & Johnson, according to unsealed documents. Now, those studies have come back to haunt the world’s largest maker of health-care products, Bloomberg News reported. In one study, inmates were paid to be injected with potentially cancer-causing asbestos so the company could compare its effect on their skin versus that of talc, a key component in its iconic baby powder. University of Pennsylvania dermatologist Albert Kligman conducted hundreds of human experiments over two decades at Holmesburg Prison in Pennsylvania. The testing regime, funded by entities such as Dow Chemical and the U.S. government, involved mostly Black inmates and first came to light decades ago in books and newspaper articles. But J&J’s involvement in the talc studies focusing on asbestos hasn’t been made public in the media before now. The unsealed prison-testing files came to light in two trials last year over legal claims that J&J’s talc-based powder causes cancer, and legal experts say that information could be powerful evidence in future cases, justifying punishment awards. While they didn’t dispute the company hired Kligman in the 1960s to do baby powder tests, J&J officials said they regretted the firm’s involvement with the dermatologist. Still, they noted the tests didn’t violate research standards at the time.

Lawmakers say they are close to an agreement to provide billions in new coronavirus relief, set to be tied to a massive government funding bill, The Hill reported. Congress is expected to include at least $15 billion in response to the Biden administration's request for new funding for COVID-19 vaccines, treatments and testing. Getting a deal on the funds would remove a significant hurdle for passing a government funding bill by Friday night, when lawmakers have to pass legislation or spark a shutdown. Sen. Roy Blunt (R-Mo.), who has been involved in drafting the bill, said that they were drafting it to include $15 billion. But that number isn’t locked in, with leadership debating adding more money. Sen. John Thune (S.D.), the No. 2 Senate Republican, appeared skeptical that it would balloon to $22.5 billion, noting that it wasn’t currently “trending” in that direction. “I don’t think the number is going to get that high, but then it could,” he said. Republicans had balked last week over the administration’s request for $22.5 billion, which Democrats had wanted to be emergency spending, meaning it wouldn’t have to be paid for. But lawmakers and two leadership aides told The Hill on Monday that they had reached an agreement for the coronavirus funding to be paid for. Thune pointed to unspent state and local government funds that were included in previous coronavirus relief measures as a source for much of the new money in the omnibus bill.

A lawyer for the U.S. Department of Justice's bankruptcy watchdog on Friday signaled the government would object to a Florida-based nursing home operator's approach to dealing with potential abuse and negligence claims in its plan to wind down its operations, Reuters reported. Joseph McMahon, representing the U.S. Trustee's office, said during a hearing before U.S. Bankruptcy Judge Karen Owens in Wilmington, Delaware, that his office will challenge what he described as non-consensual releases of certain legal claims brought by residents and their families against Gulf Coast Health Care and people and entities with ties to the company. Gulf Coast, which operates 28 nursing homes across Florida, Georgia and Mississippi, filed for bankruptcy in October with more than $200 million in debt, including $49 million in rent owed to its principal landlord, Omega Healthcare Investors. Gulf Coast has been in the process of transferring its facilities to new operators, including Consulate Health Care, Ventura Services — Florida, Citadel Care Centers and Bedrock Care. The company, which ran more than 50 facilities at its peak, blamed the COVID-19 pandemic for the decrease in occupancy levels, staffing shortages and increased costs for labor and personal protective equipment. It was one of several nursing home systems to seek bankruptcy relief as the pandemic led to nursing shortages and higher death rates among the elderly. One of the new operators taking over Gulf Coast facilities, Consulate Health Care, went through its own bankruptcy last year. Read more. 

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A 318-unit senior living rental housing community in Plano, Texas filed bankruptcy Tuesday, according to a securities filing, Bloomberg reported. BSPV-Plano, a subsidiary of the Spectrum Housing Corporation, issued about $67m of municipal bonds through the New Hope Cultural Education Facilities Finance Corporation in 2018 to finance the construction of Bridgemoor Plano. The project’s construction has been delayed by a winter storm in Texas and the COVID-19 pandemic. Senior bonds with a 7.25% coupon maturing 2053 traded on Feb. 10 at about 72 cents on the dollar. BSPV-Plano filed bankruptcy in the Eastern District of Texas in Plano, listing $50 million to $100 million in assets and liabilities. Read more. 

Don't miss the "Real Estate Implications of COVID-19 on Senior Living Business Models" session at this year's Annual Spring Meeting. Register today! 

One of Iowa’s biggest nursing home chains, now mired in bankruptcy, allegedly owes taxpayers more than $1 million in unpaid fines due to poor quality resident care, the federal government says, the Iowa Capital Dispatch reported. QHC Facilities, which owns eight skilled-nursing facilities and two assisted-living centers in Iowa, filed for bankruptcy in late December. The owner of the company, Nancy Voyna, died a few weeks after the company filed for bankruptcy and her son is now pursuing a sale of the company and all of its assets. The 10 facilities have a combined capacity of almost 750 residents. One potential hurdle to a sale is outlined in recent court filings by the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The two agencies provide QHC with a significant portion of its revenue through Medicare and Medicaid payments for resident care. According to CMS, two of QHC’s eight skilled-nursing facilities — one in Mitchellville and one in Winterset — recently faced termination from the Medicare program, which would have shut off all of the federal funding that flows into those homes for resident care. The potential terminations were “based on quality-of-care issues and mold-related issues,” CMS says. Read more.

Don't miss the "Real Estate Implications of COVID-19 on Senior Living Business Models" session at this year's Annual Spring Meeting. Register today!

Unpaid medical bills became a bigger concern during the pandemic, and now, a federal consumer agency is considering whether those debts should be banned from consumer credit reports, the New York Times reported. Rohit Chopra, director of the Consumer Financial Protection Bureau, discussed the agency’s plans this week after pointing out new research by the bureau on medical debt and its effect on Americans. The report found that 20 percent of American households say they have medical debt. It also estimated that more than half (58 percent) of the debt that appears on credit reports as being in collection stems from medical bills, a proportion that Mr. Chopra deemed “extraordinary.” “Having a medical debt collection mark on a credit record can make it harder to get credit, rent or buy a home or find a job,” Mr. Chopra said. “Families are pushed into bankruptcy by medical debts that they cannot pay.” Black and Hispanic people, as well as low-income and younger adults, have higher rates of medical debt than the overall population, the report noted. As a result, the agency will be “scrutinizing” the three major credit reporting bureaus — Equifax, Experian and TransUnion — and their handling of medical debt to make sure it is accurately reported in consumer files, Mr. Chopra said.

A mediator in Purdue Pharma's bankruptcy case on Wednesday indicated an agreement was being drafted between the company's owners and U.S. states pressing for more money to resolve allegations that the OxyContin maker fueled the opioid epidemic, Reuters reported. Members of the wealthy Sackler family, who own Purdue Pharma, have been trying to reach an agreement with eight states and the District of Columbia, after they had blocked a previous settlement that included a $4.3 billion cash payment. The Sacklers had proposed a settlement worth up to $6 billion in mediation, and most of the states had agreed to settle on those terms, according to a report filed in February by mediator Judge Shelley Chapman. Judge Chapman reported yesterday that she was unilaterally extending talks, which U.S. Bankruptcy Judge Robert Drain had allowed if she is actively involved in drafting terms. While neither Purdue nor the mediator offered any details during a Wednesday court hearing, Drain said he believed the mediation was proceeding as hoped after "reading between the lines" of the latest report. To allow the mediation to progress, Judge Drain extended a litigation shield that protects the Sacklers from being sued for their alleged role in the opioid crisis until March 23. The shield would have expired on March 3 if it was not extended.