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Sen. Bernie Sanders (D-Vt.), while wading in to a local fight over a Philadelphia hospital, proposed a plan yesterday to create a federal fund to help local governments purchase for-profit hospitals struggling with debt and in danger of closing, CNN.com reported. The announcement came during a speech at a rally to save Hahnemann University Hospital. Hahnemann is currently in bankruptcy proceedings and its leadership has signaled plans to close the hospital this fall. Sanders' appearance was part of a last-minute request from activists battling to save the hospital. "I will be very soon introducing legislation in the Senate to establish a $20 billion emergency trust fund to help states and local communities purchase hospitals that are in financial distress," Sanders said. Hahnemann is in the midst of chapter 11 proceedings and has already shuttered many of its services. The hospital's private ownership group, Philadelphia Academic Health System, has plans to completely close the hospital by September. The Pennsylvania Association of School Nurses and Nurse Practitioners, a union representing some of the hospital workers, said the closure could lead to the loss of 2,500 jobs and create a health care vacuum for a key section of Philadelphia. 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. 

A bill that would substantially boost federal Medicaid funding for Puerto Rico advanced out of a U.S. House subcommittee yesterday after lawmakers agreed to work on stricter safeguards in the wake of a government corruption scandal in the territory, Reuters reported. The Health Subcommittee sent the legislation, which would give the bankrupt U.S. commonwealth an additional $12 billion over four years, to the full House Committee on Energy and Commerce. On Wednesday, U.S. law enforcement officials announced a 32-count indictment and arrests of six people, including two former high-ranking Puerto Rico government officials, who were charged with conspiracy and other crimes in connection with millions of dollars in federal Medicaid and education funds. Angela Avila-Marrero, former executive director of Puerto Rico’s Health Insurance Administration, was indicted for her role in a scheme to steal federal Medicaid dollars through a corrupt bidding process with private contractors. Rep. Frank Pallone (D-N.J.), who chairs the Energy and Commerce Committee, said while the indictments were “very troubling,” there was no time to address the allegations in the bill. “We can’t lose sight of the fact that unless we act there will be a massive shortfall of federal funds for the Puerto Rico Medicaid program that would be devastating to the people that live there,” he said, adding he hoped lawmakers will work together to add “rigorous” oversight to the bill. Rep. Greg Walden (R-Oregon) said he was committed to ensuring measures are in the bill “to stop these types of fraudulent activities that are alleged from happening.”

Bankrupt Hahnemann University Hospital has healed a rift with one of its top creditors, Drexel University College of Medicine, but still faces resistance to its plan to close its doors, WSJ Pro Bankruptcy reported. The historic hospital — at the hub of Philadelphia’s downtown tourist and financial district — filed for chapter 11 protection on June 30. The next day marked the official start of the hospital training year for 583 residents, including graduates of Drexel’s medical school. A deal this week averted an open-court showdown between Hahnemann and Drexel over the fate of the residents. But other hurdles remain. A Philadelphia judge issued an injunction barring Hahnemann from closing its doors unless it gets authorization first from city health authorities. Amid continuing strife with city officials and demonstrations in the streets, lawyers for the hospital delayed a planned bankruptcy court hearing on the hospital’s closure plan.

A Congressional plan to tackle surprise medical bills is spurring a furious lobbying campaign and disagreements among Republican lawmakers that could make it difficult to pass the legislation this month, the Wall Street Journal reported. Measures protecting patients from high hospital bills from out-of-network doctors and other health providers has the backing of President Trump, who in May urged lawmakers to take action. Senate Health Committee Chairman Lamar Alexander (R-Tenn.) is hoping the full Senate will vote this month on a plan that would address surprise bills, after his committee approved it in late June. But fault lines have emerged over the Senate proposal, centered on whether hospitals or doctors should take a financial hit and how to settle disputes. Legal hurdles also are cropping up. The challenges come as hospitals, doctors and other industry groups fiercely defend their turf. Getting a bill to Trump now appears uncertain despite rare bipartisan agreement on the need for a legislative fix. The bill from Mr. Alexander and Sen. Patty Murray (D-Wash.) also targets a host of health-care issues, from lack of information on pricing to prescription drugs. The Senate committee approved the measure June 26. A similar plan has also been put forth by House Energy and Commerce Committee leaders. House aides said that they were optimistic the proposal would advance through the committee this month.

Hahnemann University Hospital‘s owners have filed for chapter 11 bankruptcy, CBS Philly reported. Philadelphia Academic Health System, which also owns Saint Christopher’s Hospital, filed the paperwork shortly after midnight yesterday. Allen Wilen, chief restructuring officer for Philadelphia Academic Health System LLC, says that the move will facilitate a restructuring or sale of St. Christopher’s, allowing it to remain in full operation. The real estate used by the two hospitals wasn’t included in the filing. Last Wednesday, Hahnemann announced it was closing in September because of unsustainable financial losses.