Distressed Health Care Providers—Key Restructuring Issues for 2026
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What is the background and purpose of this episode on distressed Medicare/Medicaid providers?
Okay. Well, hello, everyone, and thank you for joining our podcast today.
This is a podcast that is being done by myself, Augie Curtis, and Samuel Mazzell. We are doing this podcast to follow up on the enjoyable, lively conversation that Sam and I had at the presentation we did at the AHLA conference in Baltimore earlier this year on March 18th. Sam, I'll let Sam, I couldn't presume to introduce Sam, I'll let Sam introduce himself, but I will say in advance that he's one of the leading attorneys in this field, in the field of Medicare, and particularly Medicare insolvency and restructuring, that is the restructuring of entities that receive Medicare benefits and that interact with Medicare at a large level. Sam has been doing this for many years. He's well-known in the private bar to the government.
He's really one of the authorities, and it's a privilege for me to be on this podcast and to present with him. I, Augie Curtis, have been doing this myself for about 25 or 30 years, both in the private sector and with the government. I, like Sam, worked for quite a while in the Department of Justice in a section of the Department of Justice called the Corporate Financial Litigation Section that dealt with essentially represented agencies in bankruptcy. And a very large percentage of what we did What I did, and I believe Sam did as well, was to represent the government in Medicare-related bankruptcies, that is, bankruptcies by hospitals and other Medicare providers who had very frequently significant open issues with the government, with the Medicare program.
So both of us have seen this environment over many years from both sides. And I think both of us, and Sam particularly, have had a chance to be a part of the development of the law, understand really the most significant issues that perennially plague these situations and that that providers perennially have to deal with with the government. And so I hope we can provide you with some useful analysis and information of some of those issues. So with that, I'll turn it over to Sam and let him introduce himself and maybe kick us off on our first subject.
Great. Thanks, Augie. So my name is Sam Maisel. I'm with Denton's US LLP. I'm resident in the Los Angeles office and I direct our distressed healthcare efforts nationally. And as Augie said, I write and speak on bankruptcy and restructuring issues related to healthcare frequently and have been doing this for about 30 years. First at the US Department of Justice. Augie had the same job I did years later because I'm old. And And we had the opportunity to litigate these issues we're about to talk about against each other for years before Augie went back into the private sector. So look, I mean, this is an important issue for health lawyers and the American Health Lawyers Association. And it's important because bankruptcy can change the balance of power in a dispute with Medicare and Medicaid in a significant way.
We're going to talk about the weaknesses and the strengths of arguments. You know, I don't want to make believe it's some magic bean that gets you out of all the issues you'd like to get out of. But In many ways, restructuring and the bankruptcy code does provide a way to rebalance the dispute with Medicare and Medicaid. You know, in Medicare and Medicaid disputes, normally you have exhaustion of administrative remedies as a bar before you can even get in front of a judge. If you get in front of a federal judge, it seems that they might be more predisposed to agree with a government lawyer than a bankruptcy judge is. So in lots of respects, government lawyers find the forum a bit unfavorable. Outside of bankruptcy, Medicare has recoupment rights, which are virtually unassailable.
you know, we're not going to make believe that bankruptcy changes this as much as we'd like it to, but it does provide some arguments. It also provides some arguments with regard to suspensions for allegations of fraud and really provides some significant leverage in the sale or transfer of a Medicare-Medicaid provider agreement in terms of the transfer of the
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Chapters
8 chapters
1
What is the background and purpose of this episode on distressed Medicare/Medicaid providers?
0:00–7:15
2
How does bankruptcy jurisdiction affect disputes with Medicare and Medicaid?
7:15–13:25
3
Why does the Medicare provider agreement become a contract in bankruptcy and what does that mean for buyers?
13:25–18:35
4
What is the difference between set‑off and recoupment in Medicare/Medicaid bankruptcy cases?
18:35–26:40
5
How can providers protect themselves from suspension of Medicare or Medi‑Cal payments during bankruptcy?
26:40–32:37
6
What is the escrow‑based “risk‑share” mechanism and how does it limit liability for buyers?
32:37–37:35
7
Which circuits are most favorable for filing bankruptcy and why does venue matter?
37:35–44:00
8
What practical steps can distressed health‑care providers take to emerge from bankruptcy successfully?
44:00–50:47
Speakers
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