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A federal appeals court yesterday struck down a central provision of the Affordable Care Act, ruling that the requirement that people have health insurance was unconstitutional, the New York Times reported. But the appeals panel did not invalidate the rest of the law, instead sending the case back to a federal district judge in Texas to “conduct a more searching inquiry” into which of the law’s many parts could survive without the mandate. The 2-1 decision, by a panel of the United States Court of Appeals for the Fifth Circuit in New Orleans, left the fate of the nearly decade-old health law in limbo even as access to health care has become a central issue in the presidential race. Republicans, for whom a decision to throw out the law heading into the presidential election year could have been a political nightmare, seemed relieved, while Democrats issued a flurry of statements emphasizing that the law was still in grave danger.

The closure of Hahnemann University Hospital last summer disrupted the lives of thousands who lost jobs there, but a separate, potentially career-altering threat looms for nearly 1,000 medical residents who trained there during the 18 months that California businessman Joel Freedman was running the Philadelphia hospital, the Philadelphia Inquirer reported. The bankrupt hospital has not agreed to buy medical malpractice insurance for residents and fellows that would cover the doctors into the future for incidents while they worked at the hospital. The cost of buying the insurance on their own “ranges from prohibitive at best to impossible depending on their specialties," according to a filing last week by the Ad Hoc Committee of Hahnemann Residents and Fellows. U.S. Bankruptcy Judge Kevin Gross scheduled a hearing for today in Wilmington, Del., at which he will gather evidence on whether the bankruptcies should be converted to a liquidation as opposed to a reorganization. In his order, Gross cited the failure of the bankrupt companies to buy the insurance sought by the residents and their advocates. According to U.S. bankruptcy law, “failure to maintain appropriate insurance that poses a risk to the estate or to the public” provides grounds for converting the case to a chapter 7 liquidation from a chapter 11 reorganization.

A government report released on Thursday found health insurance companies had combed through patient charts to obtain billions of dollars of additional payments from the federal Medicare program, the New York Times reported. The report, from the federal inspector general’s office, examined payments billed by insurers for those covered by private Medicare Advantage plans, which are increasingly popular and heavily promoted by the Trump administration. The findings showed that insurers were adding on conditions like diabetes and even cancer, reporting that patients were sicker, to receive higher payments from Medicare. While the inspector general’s office did not conclude that insurers were overbilling the program, it raised concerns about whether the payments were justified and whether patients were getting appropriate care. About 21 million people enrolled in these private plans in 2018, accounting for well over a third of those covered under the federal insurance program for those who are over 65 or have disabilities. Of the $711 billion spent last year on the Medicare program, $210 billion went to Medicare Advantage.

Nursing home operator Senior Care Centers LLC won court approval for a chapter 11 plan that will restructure it into a new company majority-owned by its unsecured creditors, WSJ Pro Bankruptcy reported. Bankruptcy Judge Stacey G.C. Jernigan said at a hearing that she would confirm a reorganization plan proposed by the company and the committee of unsecured creditors. The restructured company will be led by Michael Beal as chief executive, after serving as chief operating officer of Senior Care, according to court records. The chapter 11 plan establishes a trust for the benefit of unsecured creditors that will own 80 percent of the new company’s common stock. The members of the trust advisory board will be Healthcare Services Group, Shiftkey LLC and Medline Industries Inc., court records said. The other 20 percent equity stake is earmarked for a management incentive plan.

Opioid maker Insys Therapeutics Inc. has revised its bankruptcy windup plan in an effort to appease critics that feared the defunct company was too generous with its grants of legal immunity, WSJ Pro Bankruptcy reported. States, municipalities and Native American tribes that sued Insys for damages stemming from the opioid crisis will get a chance to challenge the company’s decisions about who can still be sued over its collapse, according to a filing in U.S. Bankruptcy Court in Wilmington, Del. The defunct company also made clear that most creditors will get pennies on the dollar of what they are owed, and the U.S. Department of Justice may get a fraction of a penny for its $283 million claim. Insys filed for chapter 11 protection in June, not long after former top executives were convicted of racketeering by a jury in Boston. The convictions, and guilty pleas by other former Insys leaders, were related to tactics that included the payment of kickbacks to drive sales of the company’s top moneymaker, Subsys. An under-the-tongue formulation of the powerful painkiller fentanyl designed for breakthrough cancer pain, Subsys was prescribed for conditions like back pain and ended up addicting many users. Insys sold off its pharmaceutical business while in bankruptcy in order to raise money to pay creditors. For weeks, the company faced opposition from many creditors to a bankruptcy plan that meant little cash for them but large barriers to continued lawsuits.

The chief executive officer of OxyContin-maker Purdue Pharma LP should not collect a potential $1.3 million bonus when he has been accused of contributing to the opioid epidemic, a group of state attorneys general said yesterday in a court filing, Reuters reported. The attorneys general from 24 states said that Craig Landau should not collect a bonus that would lift his pay to $3.9 million because of his alleged role in downplaying the risks of Purdue’s drugs. The filing also said that Purdue increased Landau’s potential pay in 2018 “in preparation for the filing of this case,” and possibly to circumvent the bankruptcy code’s restrictions on such bonuses. Purdue is on track to pay $24 million in bonuses to eligible employees based on its 2019 performance so far, the company said in a Monday filing. However, Purdue said that to get support for its bonus plan it would limit Landau’s potential bonus to 50%, or $1.3 million of his $2.6 million base pay. Other employees would still get their target bonus. The attorneys general said documents that have not been made public tie Landau to the alleged misconduct by the Sackler family owners of Purdue.