%1

Sitting at the edge of Flint Hills in east-central Kansas, the town of Hillsboro boasts a small hospital that has survived a remarkable roller coaster ride even as other rural hospitals stagger and fail, the Associated Press reported. Nine months ago, everything seemed to be coming apart at the 15-bed facility, Hillsboro Community Hospital, which traces its roots back more than a century. "In the period from November 2018 through about the 10th of January of 2019, the hospital was essentially in abandoned condition," said Brent King, who was appointed bankruptcy trustee after the hospital filed for chapter 11 protection in March. "No bills were being paid, employees' wages were often not being paid." Things were so bad that employees were reduced to holding fund drives just to feed the hospital's patients. It looked like the tiny critical access hospital was destined to share the fate of other rural hospitals in Kansas that have closed in the last three years. But that prospect galvanized the small town of Hillsboro, a farming community of about 2,900 residents, to help the hospital survive.

The sale of St. Christopher’s Hospital for Children in Philadelphia have received bankruptcy court approval, Philadelphia.cbslocal.com reported. Drexel University and Tower Health have agreed to acquire St. Christopher’s Hospital for Children for a reported $50 million.“St. Christopher’s is an important health care provider, and our goal from the beginning has been to preserve uninterrupted access to world-class pediatric care and nationally recognized programs," the hospital said in a statement. "We are satisfied that this transaction ensures St. Christopher’s has a healthy future ahead of it.” The auction was prompted by the closing of Hahnemann University Hospital after its parent company filed for bankruptcy in June.

Presidential candidate Sen. Bernie Sanders (D-Vt.) released a plan on Saturday that proposes wiping out an estimated $81 billion in existing debt and changing rules around debt collection and bankruptcy, the New York Times reported. He also calls for replacing the giant credit reporting agencies with a “public credit registry” that would ignore medical debt when calculating credit scores. The plan calls for the government to negotiate and cancel the debts, though it does not specify the precise mechanism. While eliminating every American’s medical debt would probably not come cheap, Sanders’s plan could wind up costing far less than the total amount of debt he is seeking to cancel, according to some experts. Craig Antico, a founder of the charity RIP Medical Debt, which buys and forgives medical debt, estimated that the market price for $81 billion in debt could be as low as $500 million. Most past-due medical debt never gets paid, which is why bill collectors are often willing to sell the debts for pennies on the dollar.

Sienna Biopharmaceuticals Inc. has filed for bankruptcy with plans to find a buyer or investor during its chapter 11 proceedings, WSJ Pro Bankruptcy reported. The publicly traded drugmaker, whose major investors include Arch Venture Partners, filed its petition on Monday in the U.S. Bankruptcy Court in Wilmington, Del. The move to seek protection from creditors comes about a month after Sienna warned that there were substantial doubts about its ability to continue as a going concern, raised the possibility of a bankruptcy filing and said it had hired investment bank Cowen Inc. to explore financial and strategic alternatives. Westlake Village, Calif.-based Sienna filed for bankruptcy days after its cash levels fell below the minimum prescribed by a credit agreement, a court filing shows. That loan covenant required Sienna to have cash of the greater of $30 million, or $15 million plus its cash burn over the past six months. Sienna had net cash used in its operations of $21.2 million as of June 30, down from $30.2 million at the same point a year earlier, a court filing said. The company, which went public in 2017, also said its ability to raise financing has been hurt by a declining stock price. Last month, Sienna said it was told by the Nasdaq Stock Market that for 30 straight business days its stock had closed below $1 a share, the minimum required for continued listing. Sienna has until Feb. 5, 2020, to regain compliance.

Calais Regional Hospital filed for chapter 11 protection yesterday, but hospital officials promised that the 25-bed facility would stay open as the bankruptcy case proceeds, the Bangor (Maine) Daily News reported. The hospital blamed the bankruptcy filing on a number of factors, including a drop in paying and insured patients; increased levels of care the hospital has had to provide for free; inadequate reimbursement from MaineCare, the state’s Medicaid program; and increasing regulatory requirements. The hospital has lost money every year since 2007, according to its annual tax filings, though officials said Tuesday the size of the hospital’s losses shrank to $574,600 last year from $2.64 million in 2014. Serving much of Washington County and employing about 275 workers, the Calais hospital is the second rural Maine hospital to file for bankruptcy protection this year. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

The University of Virginia Health System, which sues thousands of patients each year, seizing wages and home equity to collect on overdue bills, said Friday it would increase financial assistance, give bigger discounts to the uninsured and “reduce our reliance on the legal system,” the Washington Post reported. Doug Lischke, UVA Health System’s chief financial officer, called the new policy “a first step” that could later include additional financial assistance. He said that the state-owned health-care system also plans to ask the Virginia General Assembly to change a law requiring state agencies, including health systems, to “aggressively collect” unpaid bills and charge 6 percent interest on the balance. But independent experts said the policy change, which comes on the heels of a Kaiser Health News investigation published in the Washington Post detailing the public medical center’s aggressive collection practices, still leaves numerous patients exposed to lawsuits and crippling bills. KHN found that UVA sued patients more than 36,000 times over six years ending in June 2018, sending many families into bankruptcy. It routinely billed uninsured patients for far more than what a typical insurance company would have paid. By leaving family assets vulnerable and not fully discounting list-price charges, the new guidelines remain “very tough on the poor and near-poor who have managed to amass anything of value that will help them with the daily costs of life,” said Sara Rosenbaum, a health policy professor at George Washington University.