Miami-based CareMax, a healthcare provider focused on older adults, sought Chapter 11 protection Nov. 17 and has entered into an agreement with Revere Medical to sell its management services organization and core clinic business assets. The transactions are part of a pre-arranged Chapter 11 restructuring plan which is fully supported by the company's secured lenders.
Here are eight things to know:
1. In late October, Dallas-based Steward Health Care, which sought Chapter 11 protection May 6, sold its physician group, Stewardship Health, to Nashville, Tenn.-based Rural Healthcare Group, a primary care provider organization part of Kinderhook Industries. Stewardship Health was rebranded as Revere Health.
2. CareMax is a value-based care-delivery system that operates 46 clinical centers and employs around 1,100 people. In November 2022, CareMax acquired Steward's Medicare value-based care business. It also partnered with Anthem to open 50 medical centers across the U.S. in August 2021.
3. Under the agreement, CareMax will sell Revere Health the Medicare shared savings program part of its MSO business, which supports around 80,000 Medicare beneficiaries, according to a Nov. 17 news release.
4. CareMax plans to wind down the Medicare Advantage and ACO REACH parts of its MSO business as it focuses on the transaction with Revere Medical. The company has also reached a tentative stalking-horse agreement for its operating clinic business assets with a third-party buyer. The buyer and proposed sale terms will be disclosed in the coming days should they finalize an agreement. Should an agreement not be reached, the stalking horse bid will be auctioned.
5. CareMax filed voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Northern District of Texas, and sought approval to pay employee wages, continue operations and settle critical vendor claims to ensure patient care is not disrupted.
6. Lender support has been secured by the company to hold 100% of its debt obligations, with lenders funding a $30.5 million debtor-in-possession financing facility to ensure operations are maintained during the restructuring process.
7. CareMax expects to complete the financing agreements, restructuring plan and sale transaction process by early 2025.
8. "After a careful review of the company’s strategic alternatives, we have determined that the transactions announced today are our best opportunity to protect the long-term value of the CareMax assets and ensure our patients, providers and health plans can continue to rely on the comprehensive, coordinated care we provide. We are deeply appreciative of the outstanding team members across CareMax, whose hard work and commitment to our partners is resolute," Carlos de Solo, CEO of CareMax, said in the release.