Guide-for-Nonprofit-Organizations-Bankruptcy-Issues-FINAL-with-ads

egarding the quality of patient care provided to the Debtor's patients. This reportingobligation is ongoing throughout the Debtor's bankruptcy proceeding. If the PCO determinesthat the quality of patient care provided to the Debtor's patients is declining significantly or isotherwise being materially compromised, the PCO must immediately inform the BankruptcyCourt.The PCO is required to maintain any information obtained relating to patients as confidentialinformation. The PCO may not review confidential patient records unless the court approvessuch review in advance and imposes restrictions on the PCO to protect the confidentiality of therecords.To determine whether appointment of a PCO is necessary, courts will focus on: (i) whetherDebtor has had a history of considerable patient care issues, or (ii) whether Debtor'sreorganization plan poses risks to the quality of patient care. The PCO's fees, as well as itsprofessionals' fees, likely become administrative expenses paid from the Debtor's bankruptcyestate. For more detailed information about PCO appointments in health care businessesbankruptcies, see Dalton Edgecomb, C. Daniel Motsinger, et al., The Next (Tidal) Wave ofCases: Health Care Restructurings and Insolvencies, American Bankruptcy Institute 127 (June17, 2010).Patient RecordsThe terms "patient" and "patient records" are defined in the Bankruptcy Code. The term"patient" means any individual who obtains or receives services from a health care business.The term "patient records" means any record relating to a patient, including a written documentor a record recorded in a magnetic, optical, or other form of electronic medium.Under section 351, if a health care business commences a case under Chapters 7, 9, or 11, andthe trustee or Debtor does not have sufficient cash in the estate to pay for the storage of patientrecords in the manner required under applicable federal or state law, the Debtor or trustee isrequired to promptly publish notice, in one or more appropriate newspapers, that if the patientrecords are not claimed by the patient or an insurance provider (if applicable law permits theinsurance provider to make that claim) within one year of the notice date, the patient recordswill be destroyed. The Debtor or trustee is required, during the first 180 days of that one yearnotice period, to attempt to directly notify each affected patient or insurance carrier of theimpending destruction of the records.If the patient records are not claimed by the patient or an insurance carrier during the one yearnotice period, the Debtor or trustee is required to write to any appropriate Federal agency, andrequest permission to deposit the records with that agency. The Code does not require anyFederal agency to accept the patient records.If the patient records are not claimed by a patient or insurance provider, and the Federalagencies decline to accept the records, the Debtor or trustee may destroy the patient records. Ifthe records are written records, the Debtor or trustee may shred or burn the records. If therecords are magnetic, optical, or other electronic records, the Debtor or trustee would destroythose records in any manner that would ensure that the record could not later be retrieved.59