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 Tuesday, April 3, 2018

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 complicated, discuss the implications and potential ramifications for providers in bankruptcy proceedings, and outline strategic approaches for restructuring.


The number of bankruptcy filings in the healthcare industry more than tripled in 2017. Contributing factors include cuts to Medicare and Medicaid payments, high levels of charitable care, low levels of reimbursements by insurers and third-party administrators, and mismanagement. Cuts from the ACA were not delayed by Congress again, resulting in financial distress for many hospitals.

For healthcare debtors, lenders, creditors and investors, there can be significant legal issues and factors that make insolvency particularly complicated:

  • How will the court balance the rights and interests of creditors against the desire to keep a hospital open and operating—particularly if the hospital is the only one available to an underserved population?
  • If municipal bonds funded a healthcare facility, who is ultimately liable to the creditors? Can a county or hospital authority seek to shed liabilities through the hospital’s bankruptcy, without filing 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 insolvency involves a healthcare facility. The presenters will review 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 guide counsel to providers and provider creditors for strategically navigating insolvency and the bankruptcy process.



  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


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?


Fleming, Steven
Steven Fleming

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

Kovsky-Apap, Deborah
Deborah Kovsky-Apap

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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