Villages Health where did all the money go?
 

The Villages has received over $361,000,000 in over payments from the FEDS.
The bankruptcy filings has the US taxpayers or Medicare listed as an unsecured creditor due 361 Million US $. Where is that money? That is $6500 per patient.
I noticed that the rent was paid to TV. The rent looks to be 1,135,000 per month, but no rent is forecast for October, Nov, or Dec in the pro-forma DIP budget.

- The Villages Health (TVH) ran a unique business model for a large health care provider serving predominately a senior community. Unlike just about ever other similar health care provider, TVH primary care operation has not accept traditional medicare, only specific Medicare Advantage plans.

- Upcoding, when more diagnoses than are actually present are reported to increase medicare payments, are very rare with traditional Medicare and are almost exclusively limited to home care. On the other hand, upcoding has been widely abused with Medicare Advantage plans because under MA plans, payments are made on a risk-adjusted basis meaning higher risk scores (based on reported diagnoses) lead to higher payments.

- Despite the fact that patients with traditional Medicare and supplemental plans are generally sicker and require more health care than Medicare Advantage plan holders, Medicare Advantage plans pay out, on average, 22% more per patient than those with traditional medicare.

- Without audited financial statements, including a detailed sources and uses of funds statement, it is impossible to figure out what happened to the $$$ referenced by the author of this thread. That being said, based on the bankruptcy filing information, the amount of reported assets relative to liabilities certainly indicates the money wasn't retained in THV surplus account.

- A Florida Bankruptcy Judge preliminarily approved a $39 million debtor-in-possession (known as DIP financing) plan for TVH. DIP financing is a last ditch effort to raise money, often when in bankruptcy proceedings, to stay in operation during restructuring. DIP lenders require extremely stringent terms to insure their capital is protected, such as hard collateral and being court selected to be the first to be paid within the debtors capital structure. Based on TVH's reported assets, there won't be much money left after paying off the DIP loan for either their other creditors and the money owed to Medicare.

- Below is a statement from Latham and Watkins, a firm hired to help CenterWell (Humana) in the acquisition of TVH Assets, while not taking on the Liabilities. One thing is for certain, CenterWell is diving into a hornets nest, as evident by the long list of attorneys with various areas of expertise, retained to guide them through this process. No one in their right mind would dive into a hornets nest without lots and lots of protection. One can only imagine how much money the health care provider will spend on attorneys fees, rather than providing health care.

The Villages Health (TVH), announced that it has entered into a "stalking horse" Asset Purchase Agreement with CenterWell Senior Primary Care, the nation's largest senior-focused value-based primary care provider. The agreement provides for CenterWell, the healthcare services business of Humana Inc., to acquire TVH's assets as a going concern, including eight primary care centers and two specialty care centers. A Court order approving the sale, following an auction process during which other parties may submit an offer to purchase TVH's assets, will be a condition of the transaction moving forward and closing.

Latham & Watkins LLP represents CenterWell in the transaction with a corporate deal team led by Washington, D.C. partner Brian Mangino and New York partner Amber Banks and New York counsel Richard Quay, with associates Alice Bradshaw, Lauren Stern, and Daniel Maggen. Advice was also provided on intellectual property matters by Washington, D.C. partner Morgan Brubaker, with associate Tyra Richmond; on healthcare regulatory matters by Washington, D.C. partners Jason Caron and Joseph Hudzik, Chicago partner Terra Reynolds, and Washington, D.C. counsel Nicole Liffrig Molife, with associates Chad Leiper, Megan Lich, Margaret Rote, and Danielle Scheer; on data privacy matters by Bay Area partner Heather Deixler, with associates Kathryn Parsons-Reponte and Priyanka Krishnamurthy Crissman; on insurance matters by Century City partner Kirsten Jackson and New York counsel Alexander Traum; on tax matters by Washington, D.C. partner Andrea Ramezan-Jackson, with associate Nolon Blaylock; on benefits matters by Washington, D.C. partner David Della Rocca and Washington, D.C. counsel Laura Szarmach, with associate Rebecca Fishbein; on labor matters by New York counsel Sandra Benjamin, with associate Jenny Bobbitt; on real estate matters by New York partner Dara Denberg and New York counsel Shira Bressler, with associate Sarah Jeon; on finance matters by New York partner Kendra Kocovsky, with associate Benedict Bussmann; on environmental matters by New York counsel David Langer, with associate Tal Carmeli; and on restructuring matters by Washington, D.C./New York partner Andrew Sorkin and Chicago partner Caroline Reckler, with associates Isaac Ashworth and Brian Rosen.

- Just reporting some relevant facts here, what actually happened to the $$ is up to ones interoperation of the facts.

I am sure the Sun will be telling us the facts of the case.

If you believe that have a slightly used bridge to sell.:pepper2:

Medical clinics serving mainly Medicare Advantage (MA) patients, such as TVH, generally operate very differently than traditional medical practices/ clinics. OP may be thinking about the business model of traditional medical practices. MA clinics operate differently and it’s complicated.

Perhaps much of the overpayment funds are with the Medicare Advantage insurance company(ies) that TVH works with under contract. The insurance company(ies) likely owes the US government (CMS) the overpayment. (CMS pays the MA insurer, and the insurer pays something to the MA clinic under terms of their contract.) But depending on the contract(s) between TVH and the insurance company(ies), the insurance companies may have the legal right to claw back overpayment funds from TVH for TVH’s mis-coding. Hence, the bankruptcy.

This is a business bankruptcy case so many details of TVH business dealings and contracts are not in the public domain and likely never will be. Speaking simply, business bankruptcy cases are about how much do the creditors and owners get from the bankrupt estate. In this case, the owners of TVH may get nothing for their equity stake after creditors, lawyers, etc get paid.

Don’t expect to see this bankruptcy case on a TV series. CMS overpayments are not rare. Each year, CMS makes billions of dollars of overpayments. And medical provider upcoding is also not rare.

CMS Takes Important Steps to Recover Overpayments from Medicare Advantage-2025-06-05

Medicare Part C Improper Payment Measurement (IPM) | CMS

I don’t understand how the government is involved. If the Villages was mistakenly over billing by $90 million a year, wouldn’t they be over billing the Medicare Advantage plans - UHC, Humana, and BCBS?

From my research, Medicare pays a fixed amount each month to the private insurance company offering the plan to cover your medical expenses.

Medicare pays the insurance company a predetermined, fixed monthly amount (often referred to as a "capitation payment") for each enrollee, regardless of the actual medical services used. Apparently this is about $1,000 a month!!!

The insurance company, not Medicare, is responsible for managing and paying for your healthcare services. When you receive medical care, the provider (e.g., doctor, hospital) bills the insurance company administering your Medicare Advantage Plan, not Medicare directly.

In Original Medicare (Parts A and B), providers bill Medicare directly for covered services, and Medicare pays its share (typically 80% for Part B services), with you covering the rest (e.g., 20% coinsurance).

In contrast, Medicare Advantage shifts the financial risk to the private insurance company, which receives the fixed payment and manages all claims.

So if the insurance companies were over billed, how is Medicare involved?

I’ve read all the posts so is there a simple answer to the question where did the $350 million go if that’s the right answer. They claimed assets of $50 to $100 million in the chapter 11.

That is only partially true. It is not a fixed payment in the Medicare Advantage system. CMS pays the MA insurance company a _risk-adjusted_ amount for each beneficiary. This means CMS’s MA payment to the insurance company is higher for sicker beneficiaries and lower for healthier beneficiaries. See the first link in my previous message. One aspect of this is a medical provider might upcode their services to make patients appear sicker so the CMS payment from the government is higher. Medicare Advantage is a complicated business model, not to mention the complex metrics for assessing the level of health for each MA beneficiary. It’s sort of like actuarial work and involves specialists and computer software.

The information is not in the public domain and likely will never be. I guess much (but not all) of the overpayments was/is with the MA insurance company(ies). See my first post how TVH health might be legally responsible for reimbursement. Only insiders and the government know. Others don’t.

I understand that inquiring minds want to know details but they likely will never get information. Come to think of it, there might be an opportunity for a new TV series about all of this.

So is that what happened here? The Medicare Advantage insurance companies were not over billed but Medicare overpaid on the capitation rate because TVH upcoded to make patients appear sicker than they actually were.

Even if you increased the capitation from $1,000 to $3,000, that would be $2,000 overpayment per patient so it would have to 45,000 patients to over bill $90,000,000.

Yes and the old adage, "It was fun while it lasted", comes to mind. One wonders how much of this is going on all over the country.

Since the court filing lists the US Government as a debtor I’m going to assume that that insurance companies are not involved and the US government is owed the $. If the money was spent on perks and bonuses for staff and docs any company that takes over will have a hard time retaining anyone.

If TVH gets away with all these overpayments something is really rotten in Denmark as Shakespeare used to say.

This kind of reminds me of the whole mortgage disaster, but on a different scale. In both cases, industry regulators created a moral hazard that provided the opportunity to make lots of money despite knowing the whole thing was a house of cards that would eventually come tumbling down. With subprime mortgages, the government wanted everyone to be able to own a home regardless of their financial capacity to actually repay the loan. Government guaranteed mortgages, coupled with significantly relaxed underwriting standards, created a moral hazard which allowed people to buy homes (or more expensive homes) than they could reasonably afford. Wall Street knew the loans were bad, but they didn’t care, they were making a fortune in the mortgage business and were all in. With Medicare Advantage plans, the moral hazard is the government (CMS) making risk-adjusted payments per MA patient, incentivizing upcoding to receive greater payments. In both cases, the opportunity to make lots of money now, despite knowing it’s not necessarily the right thing to do, wins out. Hence the term “moral hazard”. It’s a game of musical chairs, where everyone wins (except for taxpayers), right up until when the music stops playing.

That source is not necessarily the sole source of MA-related revenues TVH might receive. As I said, Medicare Advantage is complex. It’s not a simple HMO capitation model for medical clinics. Incentive bonuses and shared savings payments from CMS are among other possible sources of revenue for a MA clinic.

Anything specific about TVH is speculation since the records are not public.