432
‘‘(II) ancillary ambulatory, emer-
gency, or surgical treatment facility; 
‘‘(III) hospice; 
‘‘(IV) home health agency; and 
‘‘(V) other health care institution 
that is similar to an entity referred to 
in subclause (I), (II), (III), or (IV); 
and 
‘‘(ii) any long-term care facility, in-
cluding any—
‘‘(I) skilled nursing facility; 
‘‘(II) intermediate care facility; 
‘‘(III) assisted living facility; 
‘‘(IV) home for the aged; 
‘‘(V) domiciliary care facility; and 
‘‘(VI) health care institution that 
is related to a facility referred to in 
subclause (I), (II), (III), (IV), or (V), 
if that institution is primarily engaged 
in offering room, board, laundry, or 
personal assistance with activities of 
daily living and incidentals to activi-
ties of daily living;’’.
433
(b) PATIENT AND PATIENT RECORDS DEFINED.—
Section 101 of title 11, United States Code, is amended 
by inserting after paragraph (40) the following: 
‘‘(40A) ‘patient’ means any individual who ob-
tains or receives services from a health care busi-
ness; 
‘‘(40B) ‘patient records’ means any written doc-
ument relating to a patient or a record recorded in 
a magnetic, optical, or other form of electronic me-
dium;’’. 
(c) RULE
OF CONSTRUCTION.—The amendments 
made by subsection (a) of this section shall not affect the 
interpretation of section 109(b) of title 11, United States 
Code. 
SEC. 1102. DISPOSAL OF PATIENT RECORDS. 
(a) IN GENERAL.—Subchapter III of chapter 3 of 
title 11, United States Code, is amended by adding at the 
end the following: 
‘‘§ 351. Disposal of patient records 
‘‘If a health care business commences a case under 
chapter 7, 9, or 11, and the trustee does not have a suffi-
cient amount of funds to pay for the storage of patient 
records in the manner required under applicable Federal 
or State law, the following requirements shall apply: 
‘‘(1) The trustee shall—
434
‘‘(A) promptly publish notice, in 1 or more 
appropriate newspapers, that if patient records 
are not claimed by the patient or an insurance 
provider (if applicable law permits the insur-
ance provider to make that claim) by the date 
that is 365 days after the date of that notifica-
tion, the trustee will destroy the patient 
records; and 
‘‘(B) during the first 180 days of the 365-
day period described in subparagraph (A), 
promptly attempt to notify directly each patient 
that is the subject of the patient records and 
appropriate insurance carrier concerning the 
patient records by mailing to the most recent 
known address of that patient, or a family 
member or contact person for that patient, and 
to the appropriate insurance carrier an appro-
priate notice regarding the claiming or dis-
posing of patient records. 
‘‘(2) If, after providing the notification under 
paragraph (1), patient records are not claimed dur-
ing the 365-day period described under that para-
graph, the trustee shall mail, by certified mail, at 
the end of such 365-day period a written request to 
each appropriate Federal agency to request permis-
435
sion from that agency to deposit the patient records 
with that agency, except that no Federal agency is 
required to accept patient records under this para-
graph. 
‘‘(3) If, following the 365-day period described 
in paragraph (2) and after providing the notification 
under paragraph (1), patient records are not claimed 
by a patient or insurance provider, or request is not 
granted by a Federal agency to deposit such records 
with that agency, the trustee shall destroy those 
records by—
‘‘(A) if the records are written, shredding 
or burning the records; or 
‘‘(B) if the records are magnetic, optical, 
or other electronic records, by otherwise de-
stroying those records so that those records 
cannot be retrieved.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter III of chapter 3 of title 11, United States 
Code, is amended by adding at the end the following:
‘‘351. Disposal of patient records.’’.
436
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS 
OF CLOSING A HEALTH CARE BUSINESS AND 
OTHER ADMINISTRATIVE EXPENSES. 
Section 503(b) of title 11, United States Code, as 
amended by section 445, is amended by adding at the end 
the following: 
‘‘(8) the actual, necessary costs and expenses of 
closing a health care business incurred by a trustee 
or by a Federal agency (as defined in section 551(1) 
of title 5) or a department or agency of a State or 
political subdivision thereof, including any cost or 
expense incurred—
‘‘(A) in disposing of patient records in ac-
cordance with section 351; or 
‘‘(B) in connection with transferring pa-
tients from the health care business that is in 
the process of being closed to another health 
care business; and’’. 
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA-
TIENT ADVOCATE. 
(a) OMBUDSMAN TO ACT AS PATIENT ADVOCATE.—
(1) APPOINTMENT OF OMBUDSMAN.—Title 11, 
United States Code, as amended by section 232, is 
amended by inserting after section 332 the fol-
lowing:
437
‘‘§ 333. Appointment of patient care ombudsman 
‘‘(a)(1) If the debtor in a case under chapter 7, 9, 
or 11 is a health care business, the court shall order, not 
later than 30 days after the commencement of the case, 
the appointment of an ombudsman to monitor the quality 
of patient care and to represent the interests of the pa-
tients of the health care business unless the court finds 
that the appointment of such ombudsman is not necessary 
for the protection of patients under the specific facts of 
the case. 
‘‘(2)(A) If the court orders the appointment of an 
ombudsman under paragraph (1), the United States trust-
ee shall appoint 1 disinterested person (other than the 
United States trustee) to serve as such ombudsman. 
‘‘(B) If the debtor is a health care business that pro-
vides long-term care, then the United States trustee may 
appoint the State Long-Term Care Ombudsman appointed 
under the Older Americans Act of 1965 for the State in 
which the case is pending to serve as the ombudsman re-
quired by paragraph (1). 
‘‘(C) If the United States trustee does not appoint 
a State Long-Term Care Ombudsman under subpara-
graph (B), the court shall notify the State Long-Term 
Care Ombudsman appointed under the Older Americans 
Act of 1965 for the State in which the case is pending,
438
of the name and address of the person who is appointed 
under subparagraph (A). 
‘‘(b) An ombudsman appointed under subsection (a) 
shall—
‘‘(1) monitor the quality of patient care pro-
vided to patients of the debtor, to the extent nec-
essary under the circumstances, including inter-
viewing patients and physicians; 
‘‘(2) not later than 60 days after the date of 
appointment, and not less frequently than at 60-day 
intervals thereafter, report to the court after notice 
to the parties in interest, at a hearing or in writing, 
regarding the quality of patient care provided to pa-
tients of the debtor; and 
‘‘(3) if such ombudsman determines that the 
quality of patient care provided to patients of the 
debtor is declining significantly or is otherwise being 
materially compromised, file with the court a motion 
or a written report, with notice to the parties in in-
terest immediately upon making such determination. 
‘‘(c)(1) An ombudsman appointed under subsection 
(a) shall maintain any information obtained by such om-
budsman under this section that relates to patients (in-
cluding information relating to patient records) as con-
fidential information. Such ombudsman may not review
439
confidential patient records unless the court approves such 
review in advance and imposes restrictions on such om-
budsman to protect the confidentiality of such records. 
‘‘(2) An ombudsman appointed under subsection 
(a)(2)(B) shall have access to patient records consistent 
with authority of such ombudsman under the Older Amer-
icans Act of 1965 and under non-Federal laws governing 
the State Long-Term Care Ombudsman program.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter II of chapter 3 of title 11, 
United States Code, as amended by section 232, is 
amended by adding at the end the following:
‘‘333. Appointment of ombudsman.’’.
(b) 
COMPENSATION
OF
OMBUDSMAN.—Section 
330(a)(1) of title 11, United States Code, is amended—
(1) in the matter preceding subparagraph (A), 
by inserting ‘‘an ombudsman appointed under sec-
tion 333, or’’ before ‘‘a professional person’’; and 
(2) in subparagraph (A), by inserting ‘‘ombuds-
man,’’ before ‘‘professional person’’. 
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO 
TRANSFER PATIENTS. 
(a) IN GENERAL.—Section 704(a) of title 11, United 
States Code, as amended by sections 102, 219, and 446, 
is amended by adding at the end the following:
440
‘‘(12) use all reasonable and best efforts to 
transfer patients from a health care business that is 
in the process of being closed to an appropriate 
health care business that—
‘‘(A) is in the vicinity of the health care 
business that is closing; 
‘‘(B) provides the patient with services 
that are substantially similar to those provided 
by the health care business that is in the proc-
ess of being closed; and 
‘‘(C) maintains a reasonable quality of 
care.’’. 
(b) CONFORMING AMENDMENT.—Section 1106(a)(1) 
of title 11, United States Code, as amended by section 
446, is amended by striking ‘‘and (11)’’ and inserting 
‘‘(11), and (12)’’. 
SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION 
NOT SUBJECT TO AUTOMATIC STAY. 
Section 362(b) of title 11, United States Code, is 
amended by inserting after paragraph (27), as amended 
by sections 224, 303, 311, 401, 718, and 907, the fol-
lowing: 
‘‘(28) under subsection (a), of the exclusion by 
the Secretary of Health and Human Services of the 
debtor from participation in the medicare program
441
or any other Federal health care program (as de-
fined in section 1128B(f) of the Social Security Act 
pursuant to title XI or XVIII of such Act).’’. 
TITLE XII—TECHNICAL 
AMENDMENTS 
SEC. 1201. DEFINITIONS. 
Section 101 of title 11, United States Code, as 
amended by this Act, is further amended—
(1) by striking ‘‘In this title—’’ and inserting 
‘‘In this title the following definitions shall apply:’’; 
(2) in each paragraph (other than paragraph 
(54A)), by inserting ‘‘The term’’ after the paragraph 
designation; 
(3) in paragraph (35)(B), by striking ‘‘para-
graphs (21B) and (33)(A)’’ and inserting ‘‘para-
graphs (23) and (35)’’; 
(4) in each of paragraphs (35A), (38), and 
(54A), by striking ‘‘; and’’ at the end and inserting 
a period; 
(5) in paragraph (51B)—
(A) by inserting ‘‘who is not a family farm-
er’’ after ‘‘debtor’’ the first place it appears; 
and
442
(B) by striking ‘‘thereto having aggregate’’ 
and all that follows through the end of the 
paragraph and inserting a semicolon; 
(6) by striking paragraph (54) and inserting 
the following: 
‘‘(54) The term ‘transfer’ means—
‘‘(A) the creation of a lien; 
‘‘(B) the retention of title as a security in-
terest; 
‘‘(C) the foreclosure of a debtor’s equity of 
redemption; or 
‘‘(D) each mode, direct or indirect, abso-
lute or conditional, voluntary or involuntary, of 
disposing of or parting with—
‘‘(i) property; or 
‘‘(ii) an interest in property;’’; 
(7) in paragraph (54A)—
(A) by striking ‘‘the term’’ and inserting 
‘‘The term’’; and 
(B) by indenting the left margin of para-
graph (54A) 2 ems to the right; and 
(8) in each of paragraphs (1) through (35), in 
each of paragraphs (36), (37), (38A), (38B) and 
(39A), and in each of paragraphs (40) through (55),