W ith the ever-increasing number of health cumstances, including - PDF document

66฀Canal฀Center฀Plaza,฀Suite฀600฀฀•฀฀Alexandria,฀VA฀22314฀฀•฀฀(703)฀739-0800฀฀•฀฀Fax฀(703)฀739-1060฀฀•฀฀www.abi.org Lowenstein฀Sandler฀LLP Lowenstein฀Sandler฀LLP in฀New฀York. Rights฀Department฀ and฀Creditors’฀ LLP’s฀Bankruptcy฀ Lowenstein฀Sandler฀ is฀counsel฀with฀ Terence฀Watson฀ is฀a฀partner฀and฀ Norman฀Kinel฀ New฀York New฀York The Essential Resource for Today’s Busy Insolvency Professional Intensive Care II B Y N ORMAN N. K INEL AND T ERENCE D. W ATSON Is There Recourse Against PCOs for Acts Committed in the Performance of Statutory Duties? W ith the ever-increasing number of “health cumstances, including interviewing care businesses” 1 fjling for bankruptcy, patients and physicians; bankruptcy professionals and judges have (2) not later than 60 days after the date of become increasingly aware of the numerous unan - appointment, and not less frequently than swered questions surrounding the role of patient at 60-day intervals thereafter, report to the care ombudsmen (PCOs). This article will explore court after notice to the parties in interest, at the protections that are potentially available to a hearing or in writing, regarding the qual - Norman N. Kinel PCOs in connection with the exercise of their statu - ity of patient care provided to patients of the tory duties, potential remedies for those who may debtor; and have been harmed by the actions of a PCO, and sug - (3) if such ombudsman determines that the gestions for statutory changes to provide additional quality of patient care provided to patients remedies in such situations. of the debtor is declining signifjcantly or is otherwise being materially compromised, fjle with the court a motion or written report, Background with notice to the parties in interest immedi - The Bankruptcy Abuse Prevention and ately upon making such determination. 3 Consumer Protection Act of 2005 (BAPCPA) made Other than being triggered by the PCO’s belief significant changes to the Bankruptcy Code for that patient care is “declining signifjcantly or is oth - health care-related bankruptcies, including through Terence D. Watson erwise being materially compromised,” § 333 (a) (3) the addition of 11 U.S.C. § 333. Section 333 cre - does not limit the type of motion that a PCO is ated the position of “patient care ombudsman” and authorized to file. 4 Consequently, a PCO could requires courts in the chapter 7, 9 or 11 bankruptcy theoretically seek wide-ranging and case-altering proceedings of “health care businesses” to order relief based on the belief that health care that was the appointment of a PCO “unless the court fjnds provided by the debtor has been compromised. Any that the appointment of such [an] ombudsman is not such motion would likely contain signifjcant factual necessary for the protection of patients under the allegations of neglect, negligence or even miscon - specifjc facts of the case.” 2 A PCO is appointed by duct by the debtor. 5 Reports fjled by a PCO may also the U.S. Trustee and is required to perform the fol - contain similar allegations. Consequently, the mere lowing duties: fjling of any such motion or report could potentially (1) monitor the quality of patient care impact a debtor’s continued operations and reorga - provided to patients of the debtor to the extent [that is] necessary under the cir - 3 11 U.S.C. § 333(b). 4 Despite the absence of express authority, many PCOs have filed motions seeking authorization to retain counsel, although controversy continues to exist on this issue. 1 “Health care business” is defined under the Bankruptcy Code as “any public or private See,฀e.g.,฀In฀re฀Renaissance฀Hosp. , 2008 WL 5746904 (Bankr. N.D. Tex. Dec. 31, entity (without regard to whether that entity is organized for-profit or not-for-profit) that is 2008); In฀re฀Synergy฀Hematology-Oncology฀Medical฀Associates฀Inc. , 433 B.R. 316 primarily engaged in offering to the general public facilities and services for — (i) diag- (Bankr. C.D. Cal. 2010). nosis or treatment of injury, deformity, or disease; and (ii) surgical, drug treatment, 5 The authors have not located any reported decisions in which a PCO filed a motion psychiatric, or obstetric care.” 11 U.S.C. § 101 (27A). seeking relief other than authorization to retain counsel or to obtain access to otherwise 2 11 U.S.C. § 333(a)(1). confidential patient information.