As 2024 comes to a close and the Health Care Committee looks back at an eventful year (for the Committee and the health care and life sciences restructuring space as a whole), activity remains strong across the health care and life sciences restructuring industry, with health care systems, facilities and providers, pharmaceutical companies and diagnostics companies of varying sizes seeking stra
The health care arena has not been immune to recent economic trends, and bankruptcies are on the rise, especially among senior care facilities. [1] This article examines some of the trends that have led to increased filings and some of the special considerations that arise in the context of a senior care facility bankruptcy filing.
The authors are members of Dentons’ Restructuring, Insolvency and Bankruptcy practices.
Clare Moylan is a co-founder of Gibbins Advisors in Nashville, Tenn. She is a health care professional with a broad base of experience that includes operations management, turnaround and restructuring, bankruptcy, strategic planning, business analysis, performance improvement consulting and litigation support. Ms.
As 2022 has come to a close, it is time for the Health Care Committee to look back on an eventful year (for both the committee and the health care restructuring space as a whole). Although 2022 marked the return of live ABI conferences, the trajectory of the health care industry (and thus the committee’s focus) was still linked to the COVID-19 pandemic and its aftereffects.
Businesses that operate a health care facility, provide health care services, or manufacture, distribute or sell health care products may have multiple operating licenses, certifications and billing provider numbers. Sales of these businesses, including in a bankruptcy, triggers a number of change of ownership (CHOW) regulations from various state and federal agencies.
EDITOR’S NOTE: This interview has been edited for length and clarity.
Q: Jeremy, thank you so much for taking the time to talk to us. Just to get started, we wanted to ask about how you became a chief restructuring officer (CRO). What did your career path look like?
Tom, thank you for talking with me. I’ve been doing a lot work on CCRC cases, but it seems like your cases, and in particular I’m thinking about the Amsterdam restructuring, it seems like you get a very positive outcome. And I was wondering, what do you think is necessary for a successful restructuring case?
Whether a lease constitutes a lease of residential property or of nonresidential property can significantly impact the reorganization effort of a chapter 11 debtor-lessee.
Get ready to dive into the future of health care as we uncover the revolutionary impact of AI! Following a dynamic overview of the current AI landscape and its rapid advancements, this panel will discuss groundbreaking AI applications and the subsectors and players set to thrive — or falter — as AI reshapes the health care landscape. The panelists will share investment trends and speak to the enthusiasm of private equity and lenders for AI innovations. Risks will be considered, including the workforce impacts, cost, regulations and potential hurdles that come with AI.
This panel will identify the unique issues that come into play in health care asset sales, from hospitals to senior living facilities. The panelists will address closing challenges, regulatory issues, HIPPA/privacy issues, Opco/Propco issues and much more.
This panel will explore industry trends and commonalities between the parallel issues of failing health care systems and debtors bankrupted by medical debt. The panelists will discuss and debate what could happen when these two debtor groups overwhelm the bankruptcy system, the challenges that health care debtors, consumer debtors and insurance payors face today, and how practitioners across various insolvency disciplines involved in these industries can plan for the future with these trends on the horizon.
The ABI Health Care Committee hosted a panel on to discuss the state and future of the health care industry. Members of the Committee discussed the factors driving distress, including exhaustion of COVID-19 funds, labor shortages, increasing costs, increasing interest rates. The panel also highlighted how these sources of distress will likely lead to an increase in bankruptcies, remedies, and workouts in various health care sub-industries, such as senior living, hospitals, pharmaceuticals, and biotech.
Heading into the pandemic, health care was a hot sector in the restructuring landscape. Economic stimulusfunding and a need for health care facilities to address the COVID-19 pandemic led to a slowdown inrestructuring in the sector. However, stimulus funds are now drying up, and health care organizations that were struggling operationally or financially heading into the pandemic are facing even more challenges.
The senior living sector, already stressed prior to the pandemic, has been upended by COVID-19. This panel will discuss the effects that COVID-19 has had on operational and financial performance, business models past and future, and the real estate valuations of senior living facilities. The panel will also identify what in-court and out-of-court alternatives exist, and will highlight adaptive reuse opportunities for owners and operators of these facilities.
There have been a number of recent bankruptcy filings by large and high profile healthcare providers, such as the filings of Verity Health System of California, Inc., in Los Angeles (the second largest hospital bankruptcy case in American history), Hospital Acquisition LLC and 25 related debtors d/b/a Promise Health and American Academic Health System (Hahnemann University Hospital and St. Christopher Hospital in Philadelphia) in Wilmington, Delaware, and Astria Health in Yakima, Washington.
Hospital bankruptcies are on the rise, and rural hospitals are no exception. About 20% of rural hospitals are considered to be at risk of closure nationwide,and the majority of these hospitals are considered essential to their communities. In light of these trends, this webinar will provide ABI members an overview of the unique issues faced by small rural hospital designated as “critical access hospitals” (“CAHs”) by the Centers for Medicare and Medicaid Services. Established by the Balanced Budget Act of 1997, the CAH designation allows eligible rural hospitals to receive reimbursement from Medicare (and state Medicaid programs) based on 101% of allowable costs rather than the traditional fee-for-service model.
Hosted by the Health Care, Real Estate, and Technology and Intellectual Property Committees This panel will explore the rapidly changing world of information technology and medical device technology, and how it is transforming the health care system in America. Just as importantly, the panelists will discuss the financial implications and issues impacting health care providers due to the costs associated with these technological changes, and how they are dealt with in the circumstance of a financially distressed health care business.
The panelists for this webinar will discuss the various types of health care cases and the competing interests that arise from a number of perspectives, including debtor, creditor, and provider-side interests. The panel will provide an overview of the uniqueness of bankruptcy health care cases and identify proven strategies to assist practitioners to guide unsecured creditors through these difficult and often complex reorganizations.
