Thoughts on bankruptcy settlement.
- Best case scenario for debtor (TVH and controlling parties). Problem is gone and hands are washed of liabilities without further investigation into diagnostic coding and funds possibly diverted out of the business entity.
- Best case scenario for patients of TVH. Relatively quick sale to seasoned health care provider that should help minimize disruptions to services. It obviously remains to be seen how future care under the Humana umbrella will stack up to past services provided by TVH.
- Not good for creditors other than the most senior secured class (DIP financing from Citizens First) as there will be next to nothing left after their claims are satisfied. Unless something was negotiated favorably between the objectors (The U .S. Government, Florida Blue, and United Healthcare) and the Debtor that isn’t disclosed in the court settlement, then they got totally screwed. It’s not unusual for creditors to get totally screwed in bankruptcy.
- Not a good outcome for CMS (Medicare) and everyone who has paid Medicare taxes out of their hard earned paychecks. Also, not good for the long term financial solvency of Medicare. This sets a dangerous legal precedent that careless over billing, and associated penalties, can be avoided through bankruptcy and does not put up a significant deterrent for this happening in the future.
- How this works out for Centerwell (Humana) remains to be seen. They paid good money for the right to provide healthcare to TVH’s patients, without assuming any liabilities of significance. Hopefully they can make a reasonable profit doing that using acceptable diagnostic coding without sacrificing patient services?
At the end of the day, this is good news for Villager's since availability of healthcare is extremely important to a senior citizen community.
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