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Bankruptcy Filings Increase Among Doctors

Posted By Allmand Law Firm, PLLC || 25-Apr-2013

While many consumers struggle to make payments on their medical bills, there are doctors facing a similar struggle; except it involves keeping their businesses afloat. The American Bankruptcy Institute's health care committee has noticed a spike in Chapter 11 bankruptcy filings by doctors with 8 being filed in recent weeks alone. Industry experts have noticed the trend increasing over the years for many reasons.

Eight filings in recent weeks may not sound like much but some experts say this is unusual. Doctors such as orthopedic surgeons, OB/GYN and other physicians who run their own medical practice are seeking bankruptcy protection. Most cases filed have nothing to do with malpractice lawsuits, with various medical professionals being considered "top-notch" in their field or specialty. Many doctors who seek protection do so due to being unable to meet financial needs, with tightened regulations and standards making it more of a challenge for doctors to obtain payment for services performed.

The economy is also taking a toll on revenue earned. Consumers have cut back on doctor visits or choose not to have certain procedures completed, especially if they can't afford to or lack insurance coverage. Business costs for doctors have increased over the years with more paying higher malpractice insurance premiums, drugs, and other business expenditures. Shrinking insurance reimbursements are also to blame. Primary care physicians are struggling to stay afloat with patients who have little or no health insurance.

Few doctors even admitted to taking on a side job to help cover operation expenses. Yet, tax debt becomes another issue. Two years ago, a Florida-based primary care physician filed an emergency bankruptcy petition when state tax officials showed up to shut down her clinic. When officials came, she contacted her attorney over the phone and the petition was completed online with the officials in the waiting room area. Once they received the bankruptcy case number the clinic was able to stay open. The physician is using the filing to restructure debt and business finances.

Reference: http://money.cnn.com/2013/04/08/smallbusiness/doctors-bankruptcy/

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