In the News

Hospital Bankruptcy Surge Looms as Virus Rages, Stimulus Lapses

Bloomberg Law

October 28, 2020

As seen in this article, "Hospitals and other health-care providers are bracing for a bankruptcy wave as the government stimulus aid that gave a lifeline to the industry dries up.

"Even before the Covid-19 pandemic, providers were pushed to their breaking points, especially those in rural areas. At least 30 hospitals entered bankruptcy in 2019, and at least three dozen have done the same so far this year, according to data compiled by Bloomberg.

"Chapter 11 filings had been poised to go higher with the coronavirus inflating costs for protective equipment and impeding revenue-generating elective procedures. The CARES Act and accelerated Medicare advance payments helped to forestall the anticipated increase.

"But 'the pre-pandemic stresses come back' when the stimulus money starts to slow down, said Andrew Sherman, bankruptcy practice [ ] chair at Sills Cummis & Gross P.C. 'Those same issues are going to come to light, and maybe even worse post-pandemic.'"