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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37952
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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We have a s corporation in missouri. We are thinking of filing

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We have a s corporation in missouri. We are thinking of filing a chapter 11. I was wondering if our patient files are concidered assets, since we are talking about liquidation assets? I know we have never concidered them ever before on our books or taxes, but just wanted to know if a creditor could come back and say those are assets?

The records are not assets per se, but the patient list is an asset, because it can be sold to another practice, which would produce a revenue stream. There are, however, limitations to whom the records can be transfered, i.e., to a health care provider that:

  • is in the vicinity of the health care business that is closing;
  • provides patients with substantially similar services to those provided by the closing health care business; and
  • maintains a reasonable quality of care. 11 USC § 704 (a)(12).

 

 

These factors can limit the asset value of the records/patient list, because if no viable provider can be found, who is willing to accept the patients, then the records would be rendered worthless from a pure asset standpoint.

 

Hope this helps.

 

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Customer: replied 4 years ago.


So if the patient base list is an asset do we then have to value it as equity in the business. Also who sets the value of each file? Some are old, so are decease, so are good patients, some don't come anymore. Do we need to include that then as asset in our taxes? Is there any laws that protect the patient from their file or name being sold?

You can't value an individual file. You could average the value of the entire list. You know how much the patient list is worth to you, approximately, based upon how often a patient on that list pays you. In other words, the list is worth approximately the net revenue that it generates on an annual basis. You may want to discuss valuation concerns with your CPA (or, if you don't have a CPA, then find one who has experience in valuing/accounting for medical practices).

Re protecting patient information from being sold, the HIPAA privacy rule controls patient confidentiality. This is an entirely different issue, however, which requires addtional research, so if you want to discuss it, you will have to open a new Q&A session. If you put my userid (e.g., "To socrateaser") at the beginning of your new question, then I will be happy to consider the new issue.

Hope this helps.

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