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Health-Care Cases
In Part One of this article, the authors discussed the issues of whether the Debtor is a “health-care business,” if an ombudsman must be appointed, and if you should seek to prevent it. This month, the authors discuss the question, “What if HHS seeks to affect Medicare reimbursements or exclude the Debtor from a federal health-care program?”
Upon the filing of a bankruptcy case, an automatic stay is created that prevents creditors and parties in interest from taking various actions without court authority. Historically, health-care debtors were generally protected from most actions taken against them absent motion for relief from the automatic stay. BAPCPA created a wrinkle to this issue by adding Bankruptcy Code ' 362(b)(28), which creates a specific exception to the automatic stay for the Secretary of Health and Human Services (HHS) to “exclude” the debtor “from participation in the medicare program or any other Federal health care program.”
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