However, even disclosing a patient’s
name can be a violation of HIPAA,
as it can divulge that an individual
sought certain healthcare services.
A hypothetical example would be a
Chapter 11 filing by Acme Fertility
Clinics. If the debtor filed its schedules
and statements with the court and
included patient names, it would
inadvertently disclose the names of
men and women who presumably
had sought medical help when they
encountered difficulty conceiving.
It is easy to see how this would
be a direct violation of HIPAA.
HIPAA was further strengthened by
the passage of the Health Information
Technology for Economic and
Clinical Health Act (HITECH) in 2009.
Part of the federal government’s
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Chapter 11 Can Bring Rough Waters.
efforts to promote and expand the
adoption of health information
technology, HITECH also provided
for increased privacy protection in
relation to electronic health records.
How, then, is a debtor to balance the
federally mandated need to safeguard
patient information while still
meeting the disclosure requirements
under the Bankruptcy Code?
As a best practice and to the benefit the
debtor, bankruptcy case administrators
may implement specific confidentiality
processes to ensure that patients
themselves don’t inadvertently
make their healthcare information
or personal identifiable information
public. Returning to the hypothetical
example of the Acme Fertility Clinics
can illustrate how this might occur.
The debtor would send the bar date
notice and proof of claim forms to
all unsecured creditors listed on the
matrix, including patients identified as
potential creditors. Typically, proof of
claim forms in large, complex Chapter
11 cases are processed electronically
and become public documents.
However, the case administrators
for the Acme Fertility Clinics would
need to review each proof of claim
form to ensure that patients did not
include doctors’ reports, test results,
or even explanations of benefits from
their insurers as supporting materials
for the proof of claim forms they file.
If these instances are not identified
and the forms properly redacted,
the debtor risks violating HIPAA.
Even when patients or their
representatives are clearly instructed not
to include any protected information
with their proof of claim forms, such as
medical records, inevitably a claimant
will do just that. Regardless of whether
a patient voluntarily submits this
information, it is the responsibility of
bankruptcy case administrators, as
insolvency professionals, to ensure that
it does not become publicly available.
Great care must be taken to first redact
all personally identifiable information
and patient healthcare information
from a claim image before it is
posted to a website. Additionally, the
record in the claims register must be
sanitized to ensure that no materials
available in the public domain
disclose that an individual has any
sort of specific medical issue.
In fact, it is important to ensure that
all required physical, network, and
process security measures are in
place and followed throughout the
entire restructuring process and not
just during the claim filing process.
Every document in the public domain
should be reviewed and quality-checked to be certain that bankruptcy
case administrators are meeting
the stringent regulations by which
healthcare organizations must abide.
The Human Element
In any distressed situation, the
attention of management and their
advisors is rightly focused on the
operations and the immediate financial
pressures facing the company. As
such, the impact these troubled
situations may have on the people
involved are often overlooked or
not immediately addressed.
Companies in the healthcare industry
are not only employers and customers
to suppliers who rely on the business for
their livelihoods. They are also providers
of care to the chronically ill, the elderly,
and other vulnerable members of the
communities they serve. For many,
these healthcare facilities literally
deal with life-and-death situations,
and their Chapter 11 filings can be
very traumatic for all involved.
In view of that, it becomes especially
critical for a healthcare debtor to
implement a well-thought-out
communications plan with all
stakeholders. This should begin with
a facility’s employees. The doctors,
nurses, and even administrators
have the very important task of
maintaining quality of care. Often
lives depend on these medical
professionals’ abilities to put aside their
own anxiety and concerns and place
the interests of their patients first.
As a result, it is important for
this audience to receive direct
communications not only about the
actions the company has taken and
the reasoning behind them, but also
regarding management’s vision for
what the company will look like when
it emerges from Chapter 11. These
employees are the face of the healthcare