Wednesday, March 24, 2010
Co-sponsored by the Business Law and Governance, In-House Counsel, and Hospitals and Health Systems Practice Groups
Description
Even the strongest hospital credits appear to have lost reserves over the last two years. In many instances, such losses, along with the decline in the economy, have resulted in many hospitals having difficulty in meeting debt covenants, financially troubled hospitals looking for partners and infrastructure investments, and financially strong hospitals looking for opportunities. Hospitals are faced with joint ventures losing money or imploding; key physician groups facing financial problems; managed care contracting becoming more difficult; vendors going bankrupt; and their failure to have an effective physician strategy, integrated delivery system, or accountable-care organizations adversely affecting their ability to compete.
This webinar will consider these issues from the perspective of an in-house counsel who has addressed these issues in the context of a nonprofit distressed community hospital facing a financial crisis, an aging population, high unemployment, significant negative movement in payor mix, aging facilities, board and executive malaise, declining days cash on hand, limited ability to borrow additional funds, and increasing regulatory oversight. He will explore the options which the facility had, including doing nothing, downsizing operations, ceasing to provide certain services in unprofitable service lines, closing the Emergency Department, reducing trauma related services, and/or seeking a capital partner. He will then discuss the criteria which were part of considering to seek a new capital partner, including how a financially troubled organization should address the process, looking at its strengths and weaknesses, the concerns of a capital partners, preparatory due diligence, and the vision for the future.
Restructuring/Bankruptcy counsel will then provide an overview of the hospital bankruptcy situation, an overview of the Chapter 11 process versus Chapter 9, and a discussion of market trends. Counsel also will highlight specific bankruptcy issues that are not intuitive or would be a best practice to plan for, including false claims act litigation, the automatic stay, judge sensitivity to hospital issues, Medicare, and public relations considerations. Nonprofit-specific issues and the patient care ombudsman will be discussed.
Investor-owned in-house counsel will discuss the opportunities for hospital operators and issues for distressed hospitals to consider with respect to a potential sale. In addition, counsel will address what his system and others are willing to do to make deals work, particularly in the context of troubled nonprofit and district hospitals and the bankruptcy/restructuring considerations from the perspective of acquiring entities. He will address his company’s approach, strategy, and the timing issues involved, as well as issues which buyers should consider when acquiring distressed hospitals.
The panel will then enter into a discussion and there will be a Q & A.
Presenters