The bankruptcy court in Delaware recently ordered the Centers for Medicare & Medicaid Services (CMS) to resume making post-petition Medicare payments to chapter 11 debtor True Health Diagnostics LLC. CMS had been withholding payments in light of a pre-petition fraud investigation.

On June 5, the Department of Justice announced that opioid manufacturer Insys Therapeutics (Insys) agreed to settle the government’s criminal and civil investigations into an illegal marketing scheme for Subsys, an opioid spray used by adult cancer patients.

Companies in the health care industry face many unique challenges when undergoing a bankruptcy, including challenges arising due to the federal and state law framework governing the use and disclosure of medical information. In February 2018, the U.S. Department of Health and Human Services announced that it had reached a settlement with the receiver appointed to liquidate the assets of Filefax Inc., a medical record storage and transportation company, resolving claims against Filefax for potential violations of the Health Insurance Portability and Accountability Act, or HIPAA.

Companies in the healthcare industry face many unique challenges when undergoing a bankruptcy, including challenges arising due to the federal and state law framework governing the use and disclosure of medical information. In February 2018, the U.S. Department of Health and Human Services (HHS) announced that it had reached a settlement with the receiver appointed to liquidate the assets of Filefax, Inc., a medical record storage and transportation company, resolving claims against Filefax for potential violations of the Health Insurance Portability and Accountability Act (HIPAA).

The Bottom Line

St. Mary's Hospital is the first hospital in New Jersey to emerge from Chapter 11 bankruptcy and did so in less than one year. Since 2007, six hospitals have filed for bankruptcy, five of which have either closed or sold their assets in bankruptcy.

Paloian v LaSalle Bank, NA, 619 F.3d 688 (7th Cir. 2010)

CASE SNAPSHOT

UNITED STATES OF AMERICA v. ROGAN (May 12, 2011)

The decision we've all been waiting for is in -- the U.S.

Health care lenders and others evaluating or relying on the financial strength of a healthcare provider need to think about the potential recoupment and setoff of claims against Medicare/Medicaid receivables of the provider. 

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