This week, Interfaith Medical Center officials met before Judge Carla E. Craig for the final hearing on what was called the “Critical Vendor Motion.”
The motion determines payments to Interfaith vendors deemed critical and was the latest focus for the embattled hospital, as it seeks court-structured bankruptcy to help it sort through fiscal woes and relief to cover more than $10 million of operating deficits and approximately $100 million in expense obligations.
Among Interfaith’s top 20 billers is the Dormitory Authority of the State of New York, to whom Interfaith still owes about $12 million. While the Dormitory is Interfaith’s largest creditor, the AmNews has learned that medical malpractice judgments may be what comprises Interfaith’s largest liability.
As of Nov. 30, just days before having filed for chapter 11, Interfaith was on the hook to compensate seven plaintiffs more than $19 million for medical malpractice claims. Among these plaintiffs was Lilith James. Earlier this summer, James won a civil case against Interfaith worth $2 million. James is owed about $1.3 million, according to bankruptcy filings.
These documents were in sharp focus during Tuesday’s bankruptcy hearing. They state that Interfaith owes anywhere between $100 million to half a billion dollars to various creditors, who number between 1,000 and 5,000. Each creditor stands at risk of losing a substantial portion of what they had expected to receive.
Yet, the ultimate loser, should Interfaith fail to emerge from its Chapter 11 proceedings, may be the poorest people of Central Brooklyn.
The threat of Interfaith’s closure is a story written with first drafts of poverty and footnotes of Medicaid reduction. In New York, more than 30 percent of residents rely on Medicaid. That percentage level remains consistent in New York City, where over 3 million Medicaid enrollees reside, including over 400,000 children, according to the New York State Department of Health.
The New York state Legislature’s 2010 decision to reduce state Medicaid spending by 40 percent hit Interfaith harder than most other hospitals because of the hospital’s heavy intake of poor patients and heavier reliance on government reimbursements to foot the bill for these folk.
Interfaith’s bankruptcy process may span all of, and possibly beyond, 2013. Yet, should the hospital survive and merge with Brooklyn Hospital, another problem lies in waiting. The full bloom of the Affordable Care Act may be a mandate whose full enactment could put the hospital’s pocketbooks back into the red.
“Interfaith is not going to close,” said hospital spokeswoman Melissa Krantz. “But we don’t know how the issue of the Affordable Care Act is going to affect us. We definitely will be taking on poorer patients, but we don’t know how the care is going to be paid. It’s a large social issue facing us.”