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Jun 2015

Reimbursement For Closing Hospitals

Generally, when a hospital is about to be closed, the issue of collecting its outstanding accounts receivables during the wind down process is very relevant. While there is usually no reason that these receivables cannot be pursued for some reasonable time period, what if a claim for unpaid medical services is already in litigation or arbitration?

For claims in arbitration, the hospital’s employees may all be employed elsewhere by the time of the hearing. For claims in litigation, not only may these employees have relocated by the time of trial, they may have also relocated when the payor’s attorneys want to take their depositions. In addition, the employees’ absence might make it difficult, if not impossible, to respond to written discovery such as interrogatories (written questions to be answered under oath) and document requests.  If the hospital cannot respond to discovery or produce employees for depositions, it is likely a judge will dismiss the hospital’s case, leaving the hospital without any recovery whatsoever. Assuming the hospital can get the case to a court trial or arbitration hearing, the hospital’s attorneys might be placed in the difficult position of serving subpoenas on the former employees to force them to attend. None of this is likely to lead to a favorable outcome from the hospital’s perspective.

So what can be done? When closure is on the horizon, the hospital’s administrators must take the above factors into consideration and consider seeking an early resolution, if at all possible. While this might mean the hospital might have to take more of a discount on its claims than it would prefer, this option may very well be definitely better than no recovery at all!.

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