[Congressional Record Volume 145, Number 55 (Wednesday, April 21, 1999)]
[Senate]
[Pages S4063-S4064]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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            GRASSLEY-TORRICELLI HEALTH CARE BANKRUPTCY BILL

 Mr. TORRICELLI. Mr. President, it is an unfortunate result of 
today's modern health care system that many health care providers face 
serious financial difficulties. Increasingly, these health care 
providers are filing for the protection of the bankruptcy system. This 
reality was demonstrated recently in New Jersey where the parent 
company of the HIP Health Care Plan went bankrupt, leaving the plan's 
194,000 subscribers in health care limbo.
  The bankruptcy system, for all of the benefits it provides to 
debtors, creditors and the public, does little to protect patients of 
insolvent health care providers. These patients have no choice when 
their provider files for bankruptcy, they are, quite literally, 
innocent victims. In some cases such as the HIP HMO in New Jersey, 
state insurance commissioners have stepped in to manage failing 
providers. However, such steps will not always be possible,

[[Page S4064]]

and in those cases patients must have adequate protections. 
Furthermore, this bill applies not only to HMOs, but also to hospitals, 
nursing homes, and long term care providers.
  Senator Grassley and I have worked diligently to craft a fair 
bankruptcy bill that addresses the true problems of the bankruptcy 
system. We believe that the increasing frequency of health care 
bankruptcy and the problems it creates for patients is a serious 
problem that deserves to be addressed in our bankruptcy reform effort.
  Our bill would create several important patient protections. It would 
provide for the appointment of an ombudsman to monitor and assure 
continued quality of the care being provided to patients. The bill 
would set up procedures to ensure that the confidentiality of patient 
records is strictly maintained as a health care provider closes its 
operation.
  Our legislation would also raise the priority in bankruptcy of the 
costs associated with closing a health care business. Those cost are 
often incurred by state agencies, and thus the taxpayers. Finally, the 
bill would require a bankruptcy trustee to use best efforts to transfer 
patients to alternative providers when a health care business fails.
  The reality of today's health care system is that there will 
inevitably be providers who fall upon financial difficulties and seek 
the protection of the bankruptcy system. Given that reality, we must 
take the steps today to ensure that the patients of these providers 
have adequate protections.

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