Grassley's measure to require a patient ombudsman in a nursing home or hospital bankruptcy was part of his comprehensive bankruptcy reform measure, which the Senate last Thursday passed 70 votes to 28 votes. Since the House had approved the legislation, the measure immediately was sent to the President, whose staff has threatened a veto.
"Thousands of patients tie their fates to health care providers, yet federal law currently makes no consideration at all for patients' well-being in the event of a bankruptcy," Grassley said. "With a simple change to the federal bankruptcy code, my bill closes this dangerous gap in patient protection."
Grassley noted that health care bankruptcies are on the rise, making the need for this legislation critical. Over the past year, five of the nation's largest nursing home chains declared bankruptcy. They operate about 10 percent of nursing homes, including many nursing homes in some states. A significant portion of hospitals are struggling financially, and an increasing number of home health agencies are shutting their doors, Grassley said. All in all, health care business failures were up 15.5 percent from 1996 to 1997.
There is reason to believe that bankruptcy proceedings endanger patients, yet there is no legal protection against endangerment, Grassley said. The worst-case scenario has become reality at least once. Three years ago, residents of a California nursing home were literally evicted onto the street by a bankruptcy trustee. Last year, the family members of residents of a Texas nursing home chain panicked when the firm was forced into bankruptcy. The family members feared displacement of their loved ones.
To protect patients, Grassley's bill:
?requires the bankruptcy court to appoint an ombudsman to represent the interests of the patients of a health care business within 30 days after commencement of a case under Chapter 7 (Liquidation), 9 (Adjustment of Debts of a Municipality), or 11 (Reorganization);
?requires the bankruptcy trustee to use all reasonable and best efforts to transfer patients from the health care business in the process of being closed to an appropriate substitute;
?amends bankruptcy provisions to prescribe guidelines for disposal of the patient records of a health care business (including a hospital or a nursing home) that commences a proceeding for debtor relief. It provides for disposal with a state or federal agency, the patient or an insurance provider, or by destruction;
?and allows an administrative expense claim for the costs of closing a health care business, including disposal of patient records and transfer of patients to another health care business.
"This bill provides a tremendous benefit for patients with a minimal impact on creditors and debtors," Grassley said. "By approving this legislation, Congress agreed that we have to eliminate the possibility of midnight evictions at bankrupt nursing homes and hospitals. We have to ease the fear of abandonment in individuals who are at the most vulnerable state of their lives. If health care bankruptcy occurs, we have to ensure humane treatment of patients from an industry that relies upon human beings for its livelihood. I urge the President to sign this legislation and not to give in to the clamor of special interests calling for a veto."