II

106TH CONGRESS

1ST SESSION S. 840

To amend title 11, United States Code, to provide for health care and

employee benefits, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 20, 1999

Mr. GRASSLEY (for himself, Mr. TORRICELLI, and Mr. LEAHY) introduced the

following bill; which was read twice and referred to the Committee on the

Judiciary

A BILL

To amend title 11, United States Code, to provide for health

care and employee benefits, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. DEFINITIONS.

4 (a) HEALTH CARE BUSINESS DEFINED.—Section

5 101 of title 11, United States Code, is amended by insert6 ing after paragraph (27) the following:

7 ‘‘(27A) ‘health care business’—

8 ‘‘(A) means any public or private entity

9 (without regard to whether that entity is orga10 nized for profit or not for profit) that is pri-
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1 marily engaged in offering to the general public

2 facilities and services for—

3 ‘‘(i) the diagnosis or treatment of in4 jury, deformity, or disease; and

5 ‘‘(ii) surgical, drug treatment, psy6 chiatric or obstetric care; and

7 ‘‘(B) includes—

8 ‘‘(i) any—

9 ‘‘(I) general or specialized hos10 pital;

11 ‘‘(II) ancillary ambulatory, emer12 gency, or surgical treatment facility;

13 ‘‘(III) hospice;

14 ‘‘(IV) home health agency; and

15 ‘‘(V) other health care institution

16 that is similar to an entity referred to

17 in subclause (I), (II), (III), or (IV);

18 and

19 ‘‘(ii) any long-term care facility, in20 cluding any—

21 ‘‘(I) skilled nursing facility;

22 ‘‘(II) intermediate care facility;

23 ‘‘(III) assisted living facility;

24 ‘‘(IV) home for the aged;

25 ‘‘(V) domicilary care facility; and
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1 ‘‘(VI) health care institution that

2 is related to a facility referred to in

3 subclause (I), (II), (III), (IV), or (V),

4 if that institution is primarily engaged

5 in offering room, board, laundry, or

6 personal assistance with activities of

7 daily living and incidentals to activi8 ties of daily living;’’.

9 (b) PATIENT DEFINED.—Section 101 of title 11,

10 United States Code, as amended by subsection (a) of this

11 section, is amended by inserting after paragraph (40) the

12 following:

13 ‘‘(40A) ‘patient’ means any person who obtains

14 or receives services from a health care business;’’.

15 (d) PATIENT RECORDS DEFINED.—Section 101 of

16 title 11, United States Code, as amended by subsection

17 (b) of this section, is amended by inserting after para18 graph (40A) the following:

19 ‘‘(40B) ‘patient records’ means any written doc20 ument relating to a patient or record recorded in a

21 magnetic, optical, or other form of electronic me22 dium;’’.
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1 SEC. 2. DISPOSAL OF PATIENT RECORDS.

2 (a) IN GENERAL.—Subchapter III of chapter 3 of

3 title 11, United States Code, is amended by adding at the

4 end the following:

5 ‘‘§ 351. Disposal of patient records

6 ‘‘If a health care business commences a case under

7 chapter 7, 9, or 11, and the trustee does not have a suffi8 cient amount of funds to pay for the storage of patient

9 records in the manner required under applicable Federal

10 or State law, the following requirements shall apply:

11 ‘‘(1) The trustee shall mail, by certified mail, a

12 written request to each appropriate Federal or State

13 agency to request permission from that agency to

14 deposit the patient records with that agency.

15 ‘‘(2) If no appropriate Federal or State agency

16 agrees to permit the deposit of patient records re17 ferred to in paragraph (1) by the date that is 60

18 days after the trustee mails a written request under

19 that paragraph, the trustee shall—

20 ‘‘(A) publish notice, in 1 or more appro21 priate newspapers, that if those patient records

22 are not claimed by the patient or an insurance

23 provider (if applicable law permits the insur24 ance provider to make that claim) by the date

25 that is 60 days after the date of that notifica-
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1 tion, the trustee will destroy the patient

2 records; and

3 ‘‘(B) during the 60-day period described in

4 subparagraph (A), the trustee shall attempt to

5 notify directly each patient that is the subject

6 of the patient records concerning the patient

7 records by mailing to the last known address of

8 that patient an appropriate notice regarding the

9 claiming or disposing of patient records.

10 ‘‘(3) If, after providing the notification under

11 paragraph (2), patient records are not claimed dur12 ing the 60-day period described in paragraph (2)(A)

13 or in any case in which a notice is mailed under

14 paragraph (2)(B), during the 90-day period begin15 ning on the date on which the notice is mailed, by

16 a patient or insurance provider in accordance with

17 that paragraph, the trustee shall destroy those

18 records by—

19 ‘‘(A) if the records are written, shredding

20 or burning the records; or

21 ‘‘(B) if the records are magnetic, optical,

22 or other electronic records, by otherwise de23 stroying those records so that those records

24 cannot be retrieved.’’.
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1 (b) CLERICAL AMENDMENT.—The chapter analysis

2 for chapter 3 of title 11, United States Code, is amended

3 by inserting after the item relating to section 350 the fol4 lowing:

‘‘351. Disposal of patient records.’’.

5 SEC. 3. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF

6 CLOSING A HEALTH CARE BUSINESS.

7 Section 503(b) of title 11, United States Code, is

8 amended—

9 (1) in paragraph (5), by striking ‘‘and’’ at the

10 end;

11 (2) in paragraph (6), by striking the period at

12 the end and inserting ‘‘; and’’; and

13 (3) by adding at the end the following:

14 ‘‘(7) the actual, necessary costs and expenses of

15 closing a health care business incurred by a trustee,

16 including any cost or expense incurred—

17 ‘‘(A) in disposing of patient records in ac18 cordance with section 351; or

19 ‘‘(B) in connection with transferring pa20 tients from the health care business that is in

21 the process of being closed to another health

22 care business.’’.

23 SEC. 4. APPOINTMENT OF OMBUDSMAN TO ACT AS PA24 TIENT ADVOCATE.

25 (a) IN GENERAL.—
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1 (1) APPOINTMENT OF OMBUDSMAN.—Sub2 chapter II of chapter 3 of title 11, United States

3 Code, is amended by inserting after section 331 the

4 following:

5 ‘‘§ 332. Appointment of ombudsman

6 ‘‘(a) Not later than 30 days after a case is com7 menced by a health care business under chapter 7, 9, or

8 11, the court shall appoint an ombudsman to represent

9 the interests of the patients of the health care business.

10 ‘‘(b) An ombudsman appointed under subsection (a)

11 shall—

12 ‘‘(1) monitor the quality of patient care, to the

13 extent necessary under the circumstances, including

14 reviewing records and interviewing patients and phy15 sicians;

16 ‘‘(2) not later than 60 days after the date of

17 appointment, and not less frequently than every 60

18 days thereafter, report to the court, at a hearing or

19 in writing, regarding the quality of patient care at

20 the health care business involved; and

21 ‘‘(3) if the ombudsman determines that the

22 quality of patient care is declining significantly or is

23 otherwise being materially compromised, notify the

24 court by motion or written report, with notice to ap-
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1 propriate parties in interest, immediately upon mak2 ing that determination.

3 ‘‘(c) An ombudsman shall maintain any information

4 obtained by the ombudsman under this section that relates

5 to patients (including information relating to patient

6 records) as confidential information.’’.

7 (2) CLERICAL AMENDMENT.—The chapter anal8 ysis for chapter 3 of title 11, United States Code,

9 is amended by inserting after the item relating to

10 section 331 the following:

‘‘332. Appointment of ombudsman.’’.

11 (b) COMPENSATION OF OMBUDSMAN.—Section

12 330(a)(1) of title 11, United States Code, is amended—

13 (1) in the matter proceeding subparagraph (A),

14 by inserting ‘‘an ombudsman appointed under sec15 tion 331, or’’ before ‘‘a professional person’’; and

16 (2) in subparagraph (A), by inserting ‘‘ombuds17 man,’’ before ‘‘professional person’’.

18 SEC. 5. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO

19 TRANSFER PATIENTS.

20 (a) IN GENERAL.—Section 704(a) of title 11, United

21 States Code, is amended—

22 (1) in paragraph (8), by striking ‘‘and’’ at the

23 end;

24 (2) in paragraph (9), by striking the period and

25 inserting ‘‘; and’’; and
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1 (3) by adding at the end the following:

2 ‘‘(10) use all reasonable and best efforts to

3 transfer patients from a health care business that is

4 in the process of being closed to an appropriate

5 health care business that—

6 ‘‘(A) is in the vicinity of the health care

7 business that is closing;

8 ‘‘(B) provides the patient with services

9 that are substantially similar to those provided

10 by the health care business that is in the proc11 ess of being closed; and

12 ‘‘(C) maintains a reasonable quality of

13 care.’’.

14 (b) CONFORMING AMENDMENT.—Section 1106(a)(1)

15 of title 11, United States Code, is amended by striking

16 ‘‘and 704(9)’’ and inserting ‘‘704(9), and 704(10)’’.

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