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A federal judge in Los Angeles refused Friday to put an emergency hold on the $235-million sale of two financially strapped nonprofit hospitals to Santa Clara County, the Los Angeles Times reported. U.S. District Judge R. Gary Klausner denied an emergency motion by California Atty. Gen. Xavier Becerra to halt the sale until the county agreed to conditions set by the state. The county argued that an emergency stay would scuttle the sale and leave the hospitals vulnerable to closure. The sale of O’Connor Hospital and St. Louise Regional Hospital is scheduled to be completed by the end of the month. O’Connor and St. Louise are among six struggling hospitals in Northern and Southern California previously owned by the Daughters of Charity of St. Vincent de Paul. Verity Health System purchased them but could not restore them to financial health and declared chapter 11 protection in August. At the time of the sale, former Atty. Gen. Kamala Harris imposed conditions, including requirements for capital improvements, job security, emergency services and treatment of the poor. 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. 

Immune Pharmaceuticals, a New Jersey-based biopharmaceutical company specializing in the development of treatments for immunologic and inflammatory diseases, filed for chapter 11 protection yesterday, Becker's Hospital Review reported. The drugmaker was unable to secure additional funding to keep the company afloat, prompting its decision to file for bankruptcy protection. Despite making significant progress toward the strategic transaction of its lead drug, expected to generate $3 million for the company, it was unable to negotiate terms of an agreement. In addition, Immune expected to finalize a deal with Vector Therapeutics, which was in talks to acquire Immune's Ceplene with an upfront payment of $2.5 million but the transaction never closed. During the bankruptcy process the company will wind down operations as it works to sell off its assets.

Medical problems contributed to 66.5 percent of all bankruptcies, a figure that is virtually unchanged since before the passage of the Affordable Care Act (ACA), according to a study published yesterday as an editorial in the American Journal of Public Health. The findings indicate that 530,000 families suffer bankruptcies each year that are linked to illness or medical bills. The study, carried out by Dr. David U. Himmelstein, Profs. Robert M. Lawless, Pamela Foohey, Deborah Thorne, a sociologist from the Consumer Bankruptcy Project (CBP), and Dr. Steffie Woolhandler, surveyed a random sample of 910 Americans who filed for personal bankruptcy between 2013 and 2016, and abstracted the court records of their bankruptcy filings. These figures are similar to findings from the CBP’s medical bankruptcy surveys in 2001 and 2007, which were authored by three researchers in the current study (Himmelstein, Thorne, and Woolhandler), and then-Harvard law professor Elizabeth Warren. The current study found no evidence that the ACA reduced the proportion of bankruptcies driven by medical problems: 65.5 percent of debtors cited a medical contributor to their bankruptcy in the period prior to the ACA’s implementation as compared to 67.5 percent in the three years after the law came into effect.

A community hospital in Lincoln, Maine, filed for bankruptcy protection yesterday, citing steep declines in patient admissions in recent years amid a larger economic downturn in the Lincoln Lakes region, WGME.com reported. Penobscot Valley Hospital, a 25-bed critical access facility, will remain open as the chapter 11 bankruptcy filing makes its way through federal bankruptcy court. No layoffs are planned, and the hospital’s 165 workers will continue to receive paychecks, hospital CEO Crystal Landry said. The hospital has seen in-patient admissions drop 65 percent over the last four years, along with a 10 percent decrease in overall patient volume, Landry said. The hospital said its lower patient numbers were among “the ripple effects” of the closure of the Lincoln Paper and Tissue LLC mill, then the town’s largest single employer, in 2015. In addition, the hospital said a lack of Medicaid expansion in Maine and cuts to Medicaid reimbursement rates have hurt its bottom line. 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. 

After months of waging a legal war with its landlord, Orianna Health Systems, once the operator of more than 40 nursing homes, won final court approval of its chapter 11 plan last week. Now, lawyers for the nursing home operator say that its extremely litigious bankruptcy case could help provide similarly situated companies with a road map when their options for leaving bankruptcy suddenly dry up, WSJ Pro Bankruptcy reported. The fate of Orianna’s chapter 11 plan hinged largely on Rule 3019 of the Bankruptcy Code. The rule allows for modifications of a chapter 11 plan before confirmation, so long as a judge finds the modifications don’t adversely affect creditors. Without out it, bankrupt companies could have to resolicit votes from creditors every time they make small, technical changes to a plan, which are common in large chapter 11 cases. “This has always been there, but I think it’s been a little used and little understood part of the bankruptcy code,” said Thomas Califano, a lawyer for Orianna. Orianna sought chapter 11 protection in March, citing “numerous financial challenges” that have affected the broader health-care sector, including rising medical costs and falling reimbursement payments from government insurance programs.

The Trump administration yesterday proposed changes that could raise health insurance costs for millions of Americans who get coverage on the job or receive subsidies under the Affordable Care Act, the Wall Street Journal reported. The proposal, released by the Centers for Medicare and Medicaid Services, would raise the out-of-pocket maximum that people with employer-sponsored coverage pay in 2020. The individual maximum would increase by $200 to $8,200 annually, and the maximum for family coverage would increase by $400, analysts said. The plan would also change a calculation that determines how much people pay if they buy insurance from the ACA exchange and get credits to reduce their monthly premiums. The change could raise premiums next year for many of the roughly 9 million people who get the credit. About 100,000 fewer people are expected to have coverage on the exchanges as a result, according to the proposed rule. Overall, the increase would lead to net premium increases totaling about $181 million for the 2020 benefit year. Read more. (Subscription required.) 

Miss the addresses by former White House Counsel Don McGahn and former Governor Howard Dean from yesterday's Health Care Distress Program? Watch C-SPAN's coverage:

- McGahn: http://goo.gl/ExbvdH

- Dean: http://goo.gl/sGVvtV