Practice and Procedure

Alexandria, Va. — Established as a requirement 10 years ago in Bankruptcy Code amendments, the patient care ombudsman (PCO) has been shown to be an effective advocate for patients and debtors during health care bankruptcies, according to an article in the January ABI Journal. The article also found that the costs associated with hiring PCOs and related professionals do not negatively impact the debtor. “These costs can certainly be controlled through a carefully planned appointment process and good working relationship between the PCO and all constituents in the case,” Suzanne Koenig SAK Management Services LLC (Northfields, Ill.) and Nancy A. Peterman of Greenberg Traurig, LLP (Chicago) write in their article “PCOs and the Ongoing Debate over Cost: 10 Years Later.”

The Bankruptcy Code amendments in 2005 included a requirement that a PCO be appointed in all chapter 7, 9 or 11 cases filed by a health care business “unless the court finds that the [PCO] appointment is not necessary for the protection of patients under the specific facts of the case,” according to Koenig and Peterman. The PCO plays a critical role in health care business bankruptcy cases by ensuring that the quality of patient care is maintained during the bankruptcy case and that the interests of the bankrupt care facility’s patients are represented. “This is important for the patients and for all constituents, who are counting on ongoing cash flow from the business,” according to the authors. “However, there continues to be significant opposition to the appointment of PCOs due to one of the main criticisms of the bankruptcy process today: cost,” they write.

As 10 years have passed since the requirement was put in place, Koenig and Peterman write that many debtors are finding out that the PCO “can be a valuable ally in the bankruptcy case in helping with a sale process, helping address regulatory issues with governmental agencies or otherwise assisting on key case issues impacting patient care.” The authors point out that the PCO may take a position on plan negotiations, contract terminations (such as service contracts for an emergency room), funding needs or a sale process, all of which impact patient care. “The PCO’s voice can be very powerful in representing the patient’s interests and helping with the debtor’s reorganization, when those interests are aligned,” Koenig and Peterman write.

To obtain a copy of “PCOs and the Ongoing Debate over Cost: 10 Years Later,” published in the January issue of the ABI Journal, please contact John Hartgen at 703-894-5935 or via email at jhartgen@abiworld.org.

ABI will also be holding a webinar on February 3 at 1 p.m. ET, hosted by ABI’s Health Care and Secured Credit Committees, that will examine the restructuring of Continuing Care Retirement Communities. For more information and to register for free, please click here: http://www.abi.org/events/abi-live-webinar-restructuring-of-continuing-care-retirement-communities.

###

ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 12,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/education-events.