Is The Promise Of Reorganization In Health Care Illusory?

Law360, New York (August 5, 2015, 10:24 AM EDT) -- For many health care providers, Medicare and Medicaid payments are a significant source of revenues. Therefore, the government’s decision to interrupt or terminate these payments is often tantamount to putting the health care provider out of business.

These cases typically raise two conflicting statutory goals and jurisdictional structures that are almost mutually exclusive: (1) the interest in implementing the Medicare and Medicaid programs in accordance with certain standards and protection of the federal fisc, and (2) the bankruptcy provisions designed to provide an entity with a second chance and maximize the benefits for creditors. Thus, the inability of a bankruptcy court...

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