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What Constitutes a Health Care Business Under 11 U.S.C. ' 333?

By Ted A. Berkowitz and Jason W. Trigger
October 30, 2007

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ('BAPCPA') was initially enacted to reform the Bankruptcy Code as it relates to health care businesses and to protect the ongoing quality of patient care being provided by such health care establishments during a bankruptcy proceeding. Specifically, this legislation added Section 333 to the United States Code Title 11, which requires the appointment of a patient care ombudsman ('PCO') in Chapters 7, 9 or 11 reorganization cases where the debtor is a 'health care business,' as defined by the Code, unless the court finds the appointment is not necessary to protect the health and well-being of the business' patients.

The role of the PCO is twofold: 'to monitor the quality of patient care and to represent the interests of the patients of the health care business.' 11 U.S.C. ' 333(a)(1). This includes the obligation to interview patients and physicians and report to the court every 60 days in writing or at a hearing regarding 'the quality of patient care provided to patients of the debtor.' Id. at ' 333(b). The PCO must also file a motion or written report with the court if he determines that 'the quality of patient care provided to the patients of the debtor is declining significantly or is otherwise being materially compromised.' Id.

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