For Immediate
Release
Tuesday, April 20, 1999
Grassley Continues Effort to Reform Bankruptcy
Code
Washington - Sen. Chuck Grassley today introduced bi-partisan legislation to
protect patients when health care providers declare bankruptcy. The initiative
is part of Grassley's effort to achieve an overhaul of the federal bankruptcy
code.
"Right now, the bankruptcy code does a good job of helping debtors reorganize
and creditors recover losses. My bill would make sure the bankruptcy courts also
look out for patients' interests. It would require bankruptcy judges to appoint
patient ombudsmen, and it would require bankruptcy trustees to make sure
patients get transferred to other facilities when health care providers are
closed down," Grassley said.
The legislation introduced today would:
- Provide specific guidance to trustees who may not be aware of state law
requirements for maintaining patient records and/or the confidentiality issues
associated with those records.
- Bring costs associated with closing a health care business into the
category for administrative expenses of the bankruptcy code. This would
include any expenses incurred by disposing of patient records and transferring
patients to another health care facility. This creates an incentive for state
agencies to intervene during bankruptcy proceedings on behalf of patients.
- Provide for an ombudsman to act as an advocate for the patient. This is
aimed at balancing the interests between the creditor and the patient.
Grassley said these interest need balancing because the court-appointed
professionals owe fiduciary duties to creditors and the estate but not
necessarily to the patients. "The provision will help ensure continued quality
of care for patients," Grassley said.
- Require a bankruptcy trustee to use reasonable and best efforts to
transfer patients when a health care business closes.
Grassley introduced this health care bankruptcy bill with Sen.
Robert Torricelli of New Jersey. The two senators also have advanced legislation
to reform the consumer bankruptcy code. This legislation is currently under
consideration by the Senate Judiciary Committee. The bill is aimed at reducing
the number of bankruptcies filed each year. It is estimated that the
bankruptcies in the United States will reach an all-time high in 1999, for the
fourth year in a row.
Grassley said the he hopes to combine the two initiatives during full Senate
consideration of bankruptcy reform later this spring. Grassley is chairman of
the Judiciary subcommittee with jurisdiction over bankruptcy policy. Torricelli
is the subcommittee's ranking member. Grassley held a hearing on his health care
bankruptcy reform provisions in June 1998.
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