A struggling skilled nursing provider recently filed for Chapter 11 bankruptcy, unable to overcome declining reimbursement and more than $500 million in unpaid bills.
Promise Healthcare Group — based in Boca Raton, FL, with two SNFs and 14 long-term care hospitals across nine states — has been saddled with debt in recent years, tallying some $565 million in obligations. In court filings, company officials said changes in Medicare reimbursement caused revenues to dip substantially between 2015 and 2016.
The company reported a $5.2 million net loss that year, which swelled to $25.2 million in 2017. And “while overall business is fundamentally strong,” Promise has been operating with an “unsustainable balance sheet” due to underperforming facilities, the Dallas Morning News reported.
Promise will likely sell underperforming assets in Los Angeles and Saint Louis, or restructure around its high-performing facilities by tapping equity elsewhere. Promise also was hampered by a 2016 federal probe tied to improper Medicare billing for treatment of a rare protein deficiency, and a $1 million court judgement in a legal dispute with a Louisiana managed care company, according to Louisiana newspaper The Advocate.
