Bankrupt operator of Philadelphia hospitals files settlement proposal

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The bankrupt operator of Hahnemann University Hospital and St. Christopher's Hospital for Children, both in Philadelphia, has filed a motion seeking approval of a settlement that would resolve all disputes between debtors and Dallas-based Tenet Healthcare and allow the sale of St. Christopher's to move forward, according to Law360.

Center City Healthcare, the current owner of the hospitals, filed the settlement motion Nov. 18 in a Delaware federal bankruptcy court.

The settlement comes after Academic American Health System, which controls Center City Healthcare, purchased the Philadelphia hospitals from Tenet in January 2018. By September 2019, Hahnemann had closed, and both Hahnemann and St. Christopher's had entered bankruptcy. A bankruptcy judge approved the $50 million sale of St. Christopher's to West Reading, Pa.-based Tower Health and Drexel University in Philadelphia. The sale is slated to close in mid-December.

Center City Healthcare, Tenet and Tenet's revenue cycle subsidiary, Conifer have been engaged in ongoing disputes, and sometimes litigation, relating to unpaid services rendered by Tenet and Conifer to the Philadelphia hospitals. 

The settlement agreement, if approved, would resolve significant litigation and allow debtors to focus on closing the St. Christopher's sale.

Under terms of the settlement agreement, Conifer would provide billing and collection services at St. Christopher's through March 31, 2020, subject to transfer of the current and historical billing/collection data for St. Christopher's to Tower Health and Drexel University. Tenet would also provide transition services, such as IT support, for Hahnemann and St. Christopher's through Dec. 31, provided the St. Christopher's sale doesn't close before then. In exchange for providing and receipt of payment for such services — and complying with the settlement agreement — Tenet and Conifer will receive full releases from Center City Healthcare, according to Tenet.

"We are pleased to have reached this agreement. As part of the agreement, we plan to continue to provide important services to St. Christopher's to help facilitate an orderly transition so the hospital can continue to serve the community," Tenet said.

 

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