In July, we reported that Hahnemann University Hospital in Philadelphia, a teaching hospital for Drexel University, would be shutting down, leaving 570 interns and residents in limbo. Here's what happened in the aftermath.
Most were able to relocate, but now they're potentially facing another severe setback: Hahnemann's owner that covers residents' time at the hospital after they've moved on.
The coverage is important because claims are often filed years after an incident happens. Residents may have to dig into their own pockets to buy a policy and be protected.
David Aizenberg, MD, who was the director of Hahnemann's internal medicine residency program until it ended, said some residents have been quoted as high as $70,000 for a one-time payment.
"That's more than what they make in a year," Aizenberg told 鶹ý, adding that many states require uninterrupted insurance coverage for licensure. "If they don't purchase their own coverage, that may potentially disqualify them from their new position."
In denying that coverage, parent company Philadelphia Academic Health System (PAHS) -- which had filed for Chapter 11 bankruptcy -- now faces serious difficulties of its own. On Dec. 17, bankruptcy judge Kevin Gross ordered it to file for Chapter 7 instead, unless PAHS can persuade the court otherwise.
"The debtors appear to have failed to maintain appropriate insurance for physicians they employed, which would give rise to conversion pursuant to 11 U.S.C.," Gross wrote in his order, as . Chapter 11 requires that organizations keep up their insurance coverage.
"The owners are smart enough to understand that if this case is converted, there might be a greater likelihood that they will get sued for things they did before bankruptcy," Jonathan Lipson, who teaches bankruptcy law at Temple University, told WHYY.
The move provides the residents with greater leverage for negotiations, Aizenberg said.
Other Changes
And Hahnemann isn't the only entity in litigation related to the closure: for breach of contract.
The doctors argue that Drexel failed to give them enough notice that they were being terminated. The university wants to end their employment on Jan. 14, 2020, but the lawsuit alleges that can't be done until the end of the academic year, or in this case, June 30, 2020, under their current contracts.
They also allege that Drexel mismanaged the transition of patient care, making it more difficult for the doctors to take patients to their new practices.
The physicians are seeking full payment plus damages. Their lawsuit was filed Dec. 9 in Philadelphia Common Pleas Court.
Also, the Pennsylvania Department of Health officially , saying a closure survey determined it no longer meets the statutory definition of a hospital.
And Drexel University and Tower Health now officially , another PAHS facility included in the bankruptcy filing.
Hahnemann was a 170-year old safety net hospital that served Philadelphia's low-income and most vulnerable patients. Thousands of those patients will now have to find new primary care doctors in the area.
"Our internal medicine residents did a great job taking care of this underserved population," Aizenberg said. "You take away 120-something residents who saw patients in that clinic, that's thousands of patients who lose where they were getting care. That's been pretty sad to see."