While healthcare bankruptcies are down overall in 2024, the industry has faced significant financial instability this year, with bankruptcies continuing across hospitals, health systems, and other healthcare organizations. Amid mounting financial pressures from workforce shortages, rising operational costs, and declining reimbursement rates, many organizations have struggled to sustain operations.
1. Pontiac (Mich.) General Hospital sought Chapter 11 protection Nov. 23, a move that came after the hospital filed a Nov. 15 WARN notice to cut 248 employees after learning it lost Medicare funding. The hospital believes the Medicare fund exclusion is temporary and should last no more than six months.
2. Miami-based CareMax, a value-based senior care provider, sought Chapter 11 protection Nov. 17 and entered into an agreement with Revere Medical to sell its management services organization and its Medicare shared savings program. The company will also wind down part of its MSO business and focus on finalizing asset sales. CareMax secured lender support, which includes $30.5 million in debtor-in-possession financing to ensure operations continue during restructuring. The company expects the financing agreement, sale transaction process and restructuring plan to be completed by early 2025.
3. Bradenton, Fla.-based MCR Health, a nonprofit medical group, sought Chapter 11 protection Nov. 11. Some of the operational decisions, which include workforce reduction, will be done in phases. The company pointed to factors like damage and disruption following hurricanes Helene and Milton, along with change to reimbursement rates for behavioral health services.
4. Jersey City, N.J.-based CarePoint Health filed for Chapter 11 protection Nov. 3. The three-hospital, safety net system secured $67 million in funding to ensure that care is provided and its hospital stays open. CarePoint is also moving along plans to affiliate with Secaucus, N.J.-based Hudson Regional Hospital under management services organization Hudson Health System. The Chapter 11 filing was driven by challenges like low state funding, rising post-COVID costs and reimbursement issues.
5. Plymouth, N.C.-based Washington Regional Medical Center sought Chapter 11 protection Oct. 29 to help restructure the hospital's finances while ensuring patient care. The 25-bed critical access hospital will maintain operations without patient care, employee or daily service disruptions. Financial and restructuring experts were enlisted to help stabilize the hospital's finances, enhance investments in medical programs, workforce development and technology, and to improve operational efficiency.
6. Exactech, a Gainesville, Fla.-based medical device maker, also sought Chapter 11 protection on Oct. 29. The company entered into a restructuring agreement to sell its assets to existing investors and secured $85 million to aid operations during the restructuring process. The bankruptcy proceedings will pause the more than 2,000 state and federal patient lawsuits over its hip, shoulder and knee implants that were voluntarily recalled in both 2021 and 2022. Exactech will maintain normal operations during the bankruptcy proceedings, including manufacturing and providing medical devices, along with a focus on research and development.
7. Miami Beach, Fla.-based Clinical Care Medical Centers entered into an agreement with Conviva, a subsidiary of Humana, for $45 million after it sought Chapter 11 protection Oct. 13. CCMC lenders have agreed to provide a $10 million credit facility to fund administrative and operational expenses for the medical group. Conviva runs more than 300 locations across 15 states under Conviva and CenterWell Senior Primary Care brands. Once the transaction closes, CCMC will be integrated into CenterWell's primary care organization, a Humana spokesperson told Becker's.
8. Gardner, Mass.-based Heywood Healthcare exited Chapter 11 bankruptcy Sept. 30 after addressing financial issues, improving contracts and restructuring debt. The system sought Chapter 11 protection on Oct. 2, 2023, and has since focused on optimizing operations, consolidating services where needed and restoring financial stability as an independent, community-owned organization. Heywood comprises a 25-bed critical access hospital, a 134-bed acute care hospital, and a medical group.
9. Philadelphia-based Rite Aid exited Chapter 11 bankruptcy in early September after it completed financial restructuring. The U.S. drugstore chain sought protection last October, cut around $2 billion in debt and secured around $2.5 billion in exit financing. It now operates as a private company.
10. Brockway, Pa.-based Guardian Health sought Chapter 11 protection in late July and sold eight of its skilled nursing facilities across Pennsylvania and West Virginia to GBK Eight. The company also transferred operations of 11 skilled nursing facilities across Pennsylvania to Toms River, N.J.-based Oxford Valley Health.
11. Miami-based Cano Health exited Chapter 11 protection in early July after it filed for bankruptcy in February. The value-based primary care provider now runs as a reorganized private company that focuses on providing its Florida market with quality care. Cano's existing investors have committed more than $200 million in new capital to support its business plan under the restructuring.
12. Atlanta-based LaVie Care Centers, one of the biggest operators of skilled nursing facilities in the U.S., sought Chapter 11 protection in June. The company operates 43 nursing homes and assisted living facilities. It cited lower occupancy, inconsistent reimbursement rates and high labor costs as key financial challenges. LaVie has divested more than 90 facilities since the pandemic and faced litigation claims and lease liabilities. The company has up to $1 billion in assets and liabilities reaching $10 billion. It is working on a plan to repay creditors and potentially reorganize or sell operations.
13. San Diego-based Cue Health, a healthcare technology company, sought Chapter 7 protection in late May and shared plans to wind down operations. The decision came after unsuccessful efforts to improve the company's capital structure and operational efficiency. Cue's CEO resigned in March and Clint Sever, the company's co-founder, was promoted to the role. Despite reviewing its business strategy and engaging with strategic advisors, the company opted for bankruptcy. It also failed to release its first quarter financial report in May and received a warning letter from the FDA regarding its emergency use authorization for a COVID-19 test.
14. Dallas-based Steward Health Care sought Chapter 11 protection May 6. The for-profit system operated 31 hospitals in eight states at the start of the year but has sold or closed many of its hospitals as part of restructuring efforts. Steward Chairman and CEO Ralph de la Torre, MD, "amicably separated" from the health system on Oct. 1, which came after a unanimous Senate vote on Sept. 25 to hold him in contempt after skipping a hearing he was subpoenaed to attend earlier that month. Federal officials detained Dr. de la Torre the week of Nov. 18 to execute a search warrant and seize his phone as part of an ongoing investigation into the system. Officials also recently seized the phone of Armin Ernst, head of Steward's international operations.
15. Pearl River, N.Y.-based Acorda Therapeutics sought Chapter 11 protection April 1. The company closed a $185 million asset purchase agreement with Merz Therapeutics on July 10. Acorda opted to seek bankruptcy protection after it explored multiple strategic options. The company faced high bankruptcy risks in 2019, but its employees rated it highly for workplace satisfaction in 2020.