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Judge Swain dismisses $172 million-plus debt claim filed by health care centers


Hospital General Castañer

By The Star Staff


Following the approval of the central government’s debt restructuring, Judge Laura Taylor Swain, who oversees Puerto Rico’s bankruptcy, on Wednesday dismissed a claim from federally qualified health care centers seeking millions of dollars in payments from the government due since 2006.


The judge agreed to dismiss with prejudice the claim filed by Atlantic Medical Center Inc., Camuy Health Services Inc., Centro de Salud Familiar Dr. Julio Palmieri Ferri Inc., Ciales Primary Health Care Services Inc., Corp. de Serv. Médicos Primarios y Prevención de Hatillo Inc., Costa Salud Inc., Centro de Salud de Lares Inc., Centro de Servicios Primarios de Salud de Patillas Inc. and Hospital General Castañer Inc.


The facilities sought enforcement of a prior federal court order for the payment and a relief from the bankruptcy stay. However, the judge sided with the commonwealth arguments to the effect that as part of the debt adjustment plan, all parties agreed to settle their claims.


Before the commencement of the bankruptcy cases, the commonwealth had underpaid the hospitals, which are not-for-profit, federally qualified health centers that provide services to the poor, by more than $172 million, as of March 31, 2018.


The hospitals said the amount has continued to increase since the filing of the Title III cases. Federal law requires that the commonwealth compensate the facilities. The U.S. Court of Appeals for the First Circuit recognized that the health care facilities had a right to get paid.


Despite this requirement, the government failed to put in place a mechanism that enables the commonwealth to calculate and pay on a current basis the actual amounts owed to the health care facilities under the Medicaid statute.


The issue is not new. Litigation brought by the health care centers against the commonwealth had been pending before the federal court for almost 15 years.


Despite an injunction issued by the U.S. District Court requiring the commonwealth to pay the hospitals estimated amounts of what they are owed, the centers were not paid.

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