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| vol 18, num 1 | March 2021 |
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| Short Case Analysis: In re Gardens Regional Hospital and Medical Center Inc. |
| Hospitals and health care providers now face intensified pressures arising from the pandemic, with the American Hospital Association reporting that the cumulative impact of such conditions could raise the serious threat of bankruptcy or closure for providers.
While bankruptcy provides a potential mechanism to address financial distress through protections such as the automatic stay, debtor-providers may face challenges from government agencies, which — as repeat players in industry restructurings — typically have a strong incentive to litigate their positions. Such challenges often concern Medicare and Medicaid program payments, which are critical to many hospitals.
In a September 2020 decision, In re Gardens Regional Hospital and Medical Center Inc. (hereinafter, “Gardens Regional”), the Ninth Circuit examined one such issue — specifically, whether California’s Department of Health Care Services (the “State”) violated the automatic stay by deducting unpaid fees from payments that were due to the debtor pursuant to Medi-Cal, the State’s Medicaid program. |
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| The Impact of COVID-19 on the Nursing Care Industry: Threats and Signs of Recovery |
| Of all the industries most adversely affected by the global pandemic, the nursing care sector — comprised of both post-acute and long-term-care providers — has suffered greatly. The pandemic presented unthinkable operational challenges to the skilled-nursing sector in particular, resulting in significant adverse financial consequences. Despite these challenges, the sector has demonstrated continued resilience and modest signs of recovery that provide cautious optimism for the continued vitality of the sector.
Things were not all rosy for the skilled-nursing sector pre-pandemic. The industry was experiencing headwinds, including aging infrastructure, rising labor costs and turnover, payor pressure and increased competition. With the pandemic came additional challenges, both operational and financial, which have had a significant impact on both revenues and costs. On the revenue side, the American Health Care Association has estimated that the skilled-nursing sector will lose an estimated $34 billion in revenues through 2021 due to COVID and the occupancy challenges it has presented.
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| Register Today for ASM! |
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| ABI is pleased to announce the return of the Annual Spring Meeting April 12-22 — this year in a cutting-edge virtual format. Employing the same innovative platform that made last fall’s Insolvency 2020 event such an astounding success, this conference — always one of the most significant annual gatherings of bankruptcy and insolvency professionals in the
country — will introduce a number of new and improved online networking features.
This year, the Health Care Committee will be partnering with the Commercial and Regulatory Law Committee to host a panel titled "Cutting-Edge Commercial Law/Regulatory Issues in Health Care Insolvencies."
The panel will address issues that have recently arisen at the intersection of health care and commercial / regulatory law, including: regulation and ownership of cloud based / electronic records, state regulation of non-profit debtors, and recent developments in Medicare/Medicaid recoupment rights. |
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