Healthcare Insolvencies: Navigating the Intersection of Medicare, ERISA, HIPAA, AKS, Stark and the Bankruptcy Code

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, October 20, 2016

Recorded event now available

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Program Materials

This CLE webinar will provide healthcare counsel with guidance on the unique legal issues for hospitals and other healthcare providers facing insolvency. The panel will explain the factors that make healthcare provider bankruptcies particularly complex, discuss the implications and potential ramifications for providers in bankruptcy proceedings, and outline strategic approaches for restructuring.

Description

In 2016, we have already seen at least 30 significant bankruptcies in the healthcare industry, including more than two dozen hospitals and nursing facilities—and more are likely on the way. For example, approximately 13 percent of rural hospitals across the U.S. are at risk of closure, and many of those will end up before bankruptcy judges. Contributing factors to the uptick in healthcare insolvencies include cuts to Medicare and Medicaid payments, high levels of charitable care, low levels of reimbursements by insurers and TPAs, and mismanagement.

For healthcare debtors, lenders, creditors and investors, there can be significant legal issues and other factors that make insolvency especially complex. For example:

  • How will the court balance the rights and interests of creditors against the desire to keep a hospital open and operating—particularly where the hospital may be the only one available to an underserved population?
  • What if the hospital was publicly funded through municipal bonds? Who is ultimately liable to the creditors? Can a county or hospital authority seek to shed its liabilities through the hospital’s bankruptcy, without filing a bankruptcy of their own?
  • Will Medicare provider agreements be treated as executory contracts that can be assumed and assigned to a buyer (subject to the cure of any existing defaults)? Can Medicare obligations be extinguished in a section 363 sale?
  • If a physician-owned distributor is compliant with AKS/Stark, can transfers to the POD nonetheless be avoided as fraudulent under the Bankruptcy Code?
  • What is the impact of the Bankruptcy Code’s automatic stay on efforts by insurers and TPAs to “recoup” alleged overpayments? May the debtor sue the insurers and TPAs in the friendly forum of the bankruptcy court? How might this be affected by ERISA preemption?
  • Can a healthcare debtor leverage Rule 2004 of the Bankruptcy Code to obtain pre-litigation discovery that might not be available to it under ERISA?
  • How can a buyer return a bankruptcy healthcare provider to profitability, given all of the challenges these entities face?

Counsel to distressed healthcare providers, their lenders, creditors and investors must carefully consider the implications of the unique issues when navigating bankruptcy and framing a restructuring strategy. Listen as our authoritative panel of practitioners examines the unique aspects that arise when an insolvency involves a healthcare facility.

Listen as our authoritative panel of practitioners examines the unique aspects that arise when an insolvency involves a healthcare facility. The panel will examine the court treatment of Medicare provider agreements in Sec. 363 sales and Chapter 11 reorganizations, including the impact of HIPAA and PHI, AKS, Stark Law, and WARN Act obligations. The panel will offer guidance for counsel to providers and provider creditors for strategically navigating insolvency and the bankruptcy process.

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Outline

  1. Unique aspects of healthcare insolvencies
    1. Court treatment of Medicare provider agreements as executory contracts
    2. HIPAA and PHI issues
    3. AKS and Stark Law issues
    4. WARN Act obligations
    5. Others
  2. Guidance on navigating the bankruptcy process for healthcare providers and their creditors

Benefits

The panel will review these and other key issues:

  • What are the special issues facing hospitals and other healthcare providers when it is time to restructure or file for bankruptcy?
  • What impact will these unique issues have on insolvency?
  • What steps can counsel take to ensure compliance with HIPAA, AKS and Stark Law during the bankruptcy process?

Faculty

Fleming, Steven
Steven Fleming
PricewaterhouseCoopers

Mr. Fleming assists clients in the areas of strategic planning, complex debt restructurings, business enterprise...  |  Read More

Kovsky-Apap, Deborah
Deborah Kovsky-Apap

Partner
Pepper Hamilton

Ms. Kovsky-Apap focuses her practice on bankruptcy and out-of-court workouts. She also has substantial litigation...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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