When health-care providers go bankrupt, their patients need special protection. That is the underlying rationale to the Patient Care Ombudsman (PCO) provision found in Section 333(a)(1) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which provides as follows:

If the debtor in a case under chapter 7, 9, or 11 [11 USCS §§ 701 et seq., 901 et seq., or 1101 et seq.] is a health-care business, the court shall order, not later than 30 days after the commencement of the case, the appointment of an ombudsman to monitor the quality of patient care and to repreent the interests of the patients of the health-care business unless the court finds that the appointment of such ombudsman is not necessary for the protection of patients under the specific facts of the case.

Discussions in Congress about the need to monitor patient care during the bankruptcy process seems to have begun in the late 1990s. At that time, Senators Bob Torricelli (D-NJ) and Chuck Grassley (R-Iowa) expressed concerns triggered by a nursing home bankruptcy in California that occurred in 1997. 145 Cong. Rec. S28683-28684. A snippet from the Sept. 30, 1997, edition of the L.A. Times gives this account:

WOODLAND HILLS—Sixty-three residents of the Reseda Care Center, some in wheelchairs, were ejected from the building and relatives were called to pick them up after 9 p.m. Friday. In one case, a family watching the eviction on late-night TV news realized that it was the same home where they had left a 106-year-old relative.

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