Cigna has filed a legal motion objecting to the sale of a group of nursing homes as part of Chapter 11 bankruptcy proceedings. The major insurer claims the sale would give the providers “carte blanche” to end payor agreements without proper notice.
South Hills Operations LLC and a group of its affiliated facilities filed for bankruptcy May 17 and by the end of that month had asked for approval from the US Bankruptcy Court for the Western District of Pennsylvania to sell those properties.
The sale to New York-based WeCare Centers, however, would not give adequate warning of the end of payor agreements, Cigna alleged in its petition Monday.
“Cigna objects to the Sale Motion because … it fails to provide adequate and definitive notice of the proposed disposition of the Cigna Payor Agreements in connection with the Sale,” wrote Cigna lawyer Mark Conlan. “Debtors have not provided information relating to adequate assurance of future performance by any proposed Purchaser.”
The lack of notice could potentially also negatively impact residents who are reliant on Cigna coverage to afford the costs of skilled nursing care, the insurer claims.
“This de facto termination of the Cigna Payor Agreements will have a significant and immediate effect on, among others, those patients who are in the Facilities,” Conlan wrote.
Any proposed severance of the facilities from the Cigna Provider Network must be provided in advance in order to ensure that patients are, as necessary, smoothly transitioned from the facilities, and “are not economically prejudiced through no fault of their own,” Conlan wrote.
Representatives for South Hills did not respond to McKnight’s Long-Term Care News’ requests for comment Thursday.
Cigna requested that the court halt the bankruptcy sale unless its concerns were addressed, including having South Hills fully pay any debts to Cigna. The payor also asked the court to provide “such additional relief as this Court deems just and equitable.”
A meeting of creditors is currently scheduled for July 24.
