Healthcare providers who treated former employees of the now shuttered Fort Oglethorpe, Ga.-based Hutcheson Medical Center will be paid far less than the amount they're owed, as federal bankruptcy laws allow secured creditors, advisors and trustees to receive payment prior to the providers, according to the Times Free Press.
On Oct. 20, a bankruptcy judge approved the final payments for seven law firms, financial advisers and a trustee who oversaw and guided the sale of the hospital in May. The group involved with the sale will receive a combined $6 million to be divided amongst the parties. The amount is roughly 90 percent of what they are owed, according to the report.
In contrast, healthcare providers who treated former Hutcheson employees submitted claims worth nearly $2.8 million, but will receive only $650,000 to be divided amongst the various groups who submitted claims. The amount is roughly 23.4 percent of what they are owed.
Usha Rodrigues, a corporate law professor at the University of Georgia in Athens, said the disparity reflects the flaws of a system set up to benefit lawyers and financial experts more than most people. Ms. Rodrigues told the Times Free Press the payments system incentivizes lawyers and financial experts to work the many hours a bankruptcy case like Hutcheson's requires.
Erlanger Health System and ParkridgeMedicalCenter in Chattanooga, Tenn., are two of the providers that will share in the $650,000. Both declined to comment to the Times Free Press on the payment issue.