BANKRUPTCY Category Archives — DC Medical Malpractice & Patient Safety Blog Published by Washington, D.C. Personal Injury Lawyers

October 2, 2022

Big hospitals’ buck-raking schemes exploit poor and pile on medical debt

Big hospitals and hospital chains that enjoy the financial and reputational benefits of nonprofit or charitable status have taken major fire for maximizing profits while piling on patients’ crushing medical debt and exploiting the poorest and most vulnerable of the injured and sick.

Medical economists, in recent times, have zeroed in on hospitals and their opaque pricing schemes and sky-high costs as important contributors to the ever-rising, nosebleed U.S. spending on health care. Americans pay more on average than any consumers on the planet, while seeing some of the worst outcomes among peers in advanced nations. And with a third of U.S. health care spending flowing into hospitals — more than $1 trillion annually — shouldn’t the suits running institutions and big chains have expected greater scrutiny of their business practices?

Kudos to the nonpartisan Kaiser Health News service and NPR for showing how hospitals in the Dallas-Fort Worth area are thriving — by saddling patients in that metropolis with some of the heaviest per capita medical debt to be found anywhere in the country.

September 25, 2022

Appellate judges zero in on corporate twists of bankruptcy shield

by Patrick A. Malone

Federal appeals judges have expressed skepticism about the scheming by Big Pharma and other big corporations to twist U.S. bankruptcy laws to let wealthy, powerful defendants shield themselves from major claims of harms filed by plaintiffs seeking justice in civil courts.

The U.S. Court of Appeals for the Third Circuit in Philadelphia has been asked to rule on the “Texas two-step” that Johnson & Johnson resorted to when hit with an avalanche of lawsuits over its legendary baby powder and claims by tens of thousands of patients who assert that asbestos-tainted talc contributed to or caused their cancer, NPR reported, noting:

“An attorney for Johnson and Johnson faced probing questions … over the corporation’s use of a controversial bankruptcy maneuver that has frozen tens of thousands of lawsuits linked to Johnson’s baby powder. During the hearing, members of a three-judge panel of the United States Court of Appeals for the Third Circuit in Philadelphia asked whether J&J had used the legal strategy to gain ‘a litigation advantage’ over roughly 40,000 cancer patients who have sued the company.”

August 16, 2022

When claims of harms rise, more corporations are diving into bankruptcy

by Patrick A. Malone

They were a tortured part of the opioid abuse and drug overdose crisis. They have become a painful aspect of the push to hold nursing home owners and operators accountable for the shambolic response to the coronavirus pandemic.

And they soon may be an obstacle to military veterans’ attempts to get justice for defective devices that were supposed to protect their hearing.

Bankruptcy courts, the evidence increasingly shows, are at risk of warping their congressional mandate to help struggling enterprises sort out complex business operations. They are instead offering a legal haven to big corporations zealously protecting their profits from civil claims they harmed others.

July 10, 2022

U.S. nears next health insurance cliff with affordability crisis growing

by Patrick A. Malone

Even as Congress lumbers into creating the next crisis for millions of Americans and whether they can access and afford health insurance, the giant, built-in flaws in the current coverage system keep sending far too many patients and their loved ones into a financial morass with which politicians and policymakers refuse to reckon.

Successive Democratic and Republican administrations have clashed over health insurance, notably the coverage extended to poor, working poor, and middle-class folks under Obamacare. But the people in charge have erred, big time, by blindly accepting a health care fallacy that plagues the U.S. system, according to Aaron E. Carroll, the chief health officer for and a distinguished professor of pediatrics at Indiana University. He said this in a New York Times Opinion article:

“The Affordable Care Act was supposed to improve access to health insurance, and it did. It reduced the number of Americans who were uninsured through the Medicaid expansion and the creation of the health insurance marketplaces. Unfortunately, it has not done enough to protect people from rising out-of-pocket expenses in the form of deductibles, co-pays, and co-insurance. Out-of-pocket expenses exist for a reason; people are less likely to spend their own money than an insurance company’s money, and these expenses are supposed to make patients stop and think before they get needless care. But this moral-hazard argument assumes that patients are rational consumers, and it assumes that cost-sharing in the form of deductibles and co-pays makes them better shoppers. Research shows this is not the case. Instead, extra costs result in patients not seeking any care, even if they need it.

June 24, 2022

Financial punishment is now a built-in aspect of U.S. health care system

by Patrick A. Malone

The sky-high and relentlessly rising cost of U.S. health care is slamming patients, ensnaring them in pricey over-testing, over-diagnosing, and over-treatment. It is pounding them with pervasive, pernicious, and unacceptable medical debt.

The crushing burden of expensive health care is leaving consumers going without as they also struggle now with soaring prices for gas, food, and other household basics.

Punishing finances have become part and parcel of the American way of health care, with “more than 100 million people in America ― including 41% of adults ― beset by a health care system that is systematically pushing patients into debt on a mass scale,” according to an unfolding investigation by the independent, nonpartisan Kaiser Health News service and National Public Radio. As the media organizations reported:

March 25, 2022

Good news for patients on credit reports and maybe that Medicare hike

by Patrick A. Malone

Patients battered by sky-high health care costs are getting a bit of promising news:

One set of federal regulators may have jawboned the leading credit reporting agencies to deal better with how they tell lenders about individuals’ medical debt and its significance for their hiring, renting, borrowing, and more.
And another set of federal regulators may be getting closer to rolling back one of the largest Medicare premium increases in recent memory.

March 17, 2022

Medical debt mires millions in a flood of red ink

by Patrick A. Malone

Medical debt, one of the most shameful aspects of the U.S. health care system, has only become more so in recent times, drowning patients in an ever-rising flood of red ink now climbing past $195 billion.

The money owed by millions of Americans to doctors, hospitals, labs, Big Pharma and others in healthcare and big systemic problems have raised alarms for experts at the Kaiser Family Foundation, the Commonwealth Fund, and the Consumer Financial Protection Bureau.

The independent, health-focused nonprofits and the federal consumer agency say that soaring indebtedness — increased by the cost of coronavirus pandemic care — keeps patients from getting medical treatments and prescription drugs they badly need and that could maintain or improve their health.

March 13, 2022

Billionaire clan assailed as ‘scum of earth’ in unusual opioids hearing

by Patrick A. Malone

Three members of a plutocratic clan finally got a direct, bitter earful from those who suffered grievous harms from the opioid crisis which was fostered, critics say, by their family business — Purdue Pharmaceutical and its powerful prescription painkiller OxyContin.

As part of prospective $10 billion settlement of thousands of lawsuits by states, counties, cities, Indian tribes, and individuals against Purdue, members of the Sackler family have, at long last, expressed “regret” about the opioids crisis, for which they also emphatically deny any responsibility.

But they also agreed that a federal bankruptcy judge would conduct an unusual hearing at which claimants could confront the family. The Sacklers listened at the session to the speakers, as agreed upon, without comment. The family members, as the Associated Press reported, were:

March 9, 2022

Plutocrats up the ante by a few billion to settle a sorry opioids saga

by Patrick A. Malone

A plutocratic clan has upped its ante by $1.5 billion in an apparently successful bet that using bankruptcy courts, mediation, and offering to settle giant claims in the opioid abuse and drug overdose crisis will be cheaper and less risky than battling on with thousands of plaintiffs seeking billions of dollars more.

Members of the Sackler family, thus, may elude still the harshest possible reckoning that they have fought tooth and nail to avoid — losing maximum amounts of the fortune they amassed through their company, Purdue Pharmaceutical, and its potent, path-blazing painkiller OxyContin, and getting held personally liable in the civil system in a public health nightmare that has claimed 500,000 lives in a decade.

(Family members would not be free of potential criminal charges, though experts have long said these would be difficult to press.)

March 1, 2022

$26 billion settlement will fund battles against opioid crisis

by Patrick A. Malone

States, counties, and cities within weeks could start to receive desperately needed money to battle the deadly opioid abuse and overdose crisis as part of a newly finalized, $26 billion settlement with the largest distributors of prescription medications and a onetime maker of powerful painkillers.

Janssen, one of the distributors, and the pharmaceutical giant Johnson & Johnson will pay $5 billion a year for nine years as part of the deal struck in the summer and approved by plaintiffs in the case, according to the New York Times. The other three distributors — McKesson, Cardinal Health, and AmerisourceBergen —will pay a combined $21 billion over 18 years.

Under the settlement, 85% of these payouts will cover addiction treatment and prevention efforts aimed at quelling the opioid crisis. It has claimed an estimated 500,000 American lives over a decade. It worsened during the coronavirus pandemic, killing an estimated 100,000 Americans last year and setting disconcerting new fatality records, especially with the rise of synthetic opioids like fentanyl. Those drugs, which criminals are lacing into their wares, including marijuana, are extremely potent at even tiny doses.