Wyoming hospital resolves 20 malpractice suits that pushed it into bankruptcy

Powell (Wyo.) Valley Healthcare has emerged from bankruptcy, and the hospital's reorganization plan resolves about 20 malpractice lawsuits that pushed the facility into bankruptcy in 2016.

Powell Valley Healthcare filed for Chapter 11 bankruptcy protection in May 2016. At that time, the board said the only reason for entering bankruptcy was a flood of litigation over surgeries performed by orthopedic surgeon Jeffrey Hansen, MD.

Former patients of Dr. Hansen brought the lawsuits over surgeries performed in 2013 and prior. He was employed by Powell Valley Healthcare from 2006 through February 2014. Dr. Hansen, who has denied any wrongdoing, resigned from the hospital after being suspended over patient safety concerns.

The hospital board said filing for Chapter 11 bankruptcy would allow the hospital to effectively deal with the lawsuits while not disrupting operations.

Powell Valley Healthcare's reorganization plan went into effect March 1, according to the Powell Valley Tribune. The reorganization plan calls for the hospital to pay $3 million over the next eight years to the patients who filed claims against the hospital. The patients will also receive $3 million from UMIA Insurance, which provided medical malpractice insurance to the hospital from August 2014 through August 2016, and an additional $127,500 from a company that helped manage the hospital while Dr. Hansen was employed there.

The amount each patient will receive will be determined through mediation at a later date.

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