This whole thing is a very interesting real life business case study. Speculation abound. At this point no one, not on the inside, really knows if this is an innocent mistake, total incompetence, our intentional fraud. The original question from the first post in this thread, “where did all the money go”, is a valid question. Generally speaking, the money could have gone into three broad categories, or a combination there of.

1) Invested wisely back into hard assets necessary to support a growing long term business.
2) Used to both retain and attract talented employees necessary to service a rapidly growing and health care needy senior population.
3) Diverted away from the he business to benefit the controlling principles.

Bases on the available assets, relative to liabilities (many being owed back to Medicare for overpayments and associated penalties), listed in the bankruptcy filing, it’s pretty clear the money didn’t go into option #1. It’s difficult to say where the money went between options #2 and 3? Here is hoping, for the long term best interest of all Villagers needing quality local health care, the money went the path of option #3. If the money was truly spent mostly on option #2, that’s not a good thing, as that money won’t be available in the future, and a drain of quality talent could be in the near future.

As previously noted in post #37 of this thread, the bigger picture here isn’t about blame for what has happened, it’s about the availability, going forward, of enough quality health care to meet the needs of a a very rapidly growing 55+ senior citizen retirement community that already has a highly stressed health care system. This is not only extremely important for all of us Villagers extremely important health care needs, but also the value of our Villages homes. Let’s not all bury our heads in the sand and lose track of the much bigger picture. This event casts a very dark cloud over the future of health care in our community.

Is that true? TVH does not own the buildings but instead pays rent? Does anyone know who owns the buildings?

It is well known that The Developer retains ownership of all the commercial properties, and changes significant rent to the businesses that occupy them. That would include the medical clinics.

You are assuming that coding/billing somehow "changed" in 2020. The statement is ONLY that a retrospective review started looking at billing from 2020 to the present, it does not address 2012-2020. If the same billing and coding practices were in place from 2012 to 2020, your whole premise falls apart. NO adjustment in budget. No doubling the revenue. Just business as usual.

Now here's a concept I haven't considered: Many posters are considering the $361 M as "extra" and want to know where the money went. What if (hypothetical) they only broke even and without the "overpayments" they would have been in $361M of debt, ie: bankrupt a long time ago?????

What should they charge? Insignificant rent?

It appears that the developer is charging rent to himself.
I would love to listen in to those “negotiations.”

I would think that TVH would get the “family discount” from the developer.

When my family comes and visits for a week, I don’t charge them a penny. And I am not a billionaire.

That's not how business works.

The "Developer" consists of 100's of corporations and entities.

I started out this thread with the question where did all the money go? If you are a patient at TVH and the money was paid to keep the lights on expect dark buildings. If the money was used to fund lavish leaseholder improvements at Brownwood you should be fine unless the developer raises the 1,100,000 per month rent on the centers. I hate Brownwood and changed providers because St. Lukes was sending me to Brownwood for appointments. Moving out of the Brownwood care center should reduce the rent. Maybe that will be enough.

Thanks Doc, there’s the bigger picture I’ve been trying to get folks to focus on. If that’s the case, what does that say about the future of health care in the fastest growing senior citizen community on the entire planet? People need to stop worrying about the past and contemplate the future availability of quality health care in the Villages! This unfortunate event most certainly doesn’t make the future look more positive.

What tophcfa is highlighting is that

1) medicare is a very low reimbursement payment program. . most doctors and hospital systems can't survive with all the CMS requirements on just medicare reimbursements alone. That is why CMS has an additional reimbursement for improved outcomes, separate from individual encounter reimbursements. retirees have less opportunity for improved outcomes

2) most non retirement area hospitals have a mix of higher private pay insurance which is primarily employer sourced insurance, which pays a higher rate to offset the medicare rate to break even or not lose money.

3) So to stay financially solvent, taking only medicare isn't sustainable. . . upcoding with MA makes elderly patients financially viable. . . keep that in mind. .

So the problem with rapid growth of housing for long lived Medicare members, ie, the villages, can easily and quickly outstrip the hospital capacity without also planning and building simultaneously hospital capacity. This would fall on the developer, which he may or not make as a close secondary priority. .

So let's say the developer did keep up building hospital beds in the proper ratio, which health care system would lease out and operate out of the buildings if the primary reimbursement is medicare? and what's the probability that CMS will be able to pay for the reduced improved outcome potential? especially if one wants to reduce the federal deficit [b]without]/b] increasing taxes?. . . .

the whole US health care system is a financial conundrum/dilemma/enigma/paradox, which currently has no solution on the horizon. . its a damn can being kicked down the road. .

best to stay healthy and realize that there are limits to everything, there are no unlimited sources of money

Is Medicaid even less?

Yes, Medicaid is even less. That's why some doctors and clinics refuse to see, or limit, the Medicaid patients they accept. That's why long-term care homes that are mostly Medicaid residents have a reputation of being dirty and poorly staffed.

Not set up for profit
 

Key Assumptions
Patient Load Context: The 55,000 Medicare patient load refers to unique patients served annually, likely in a hospital or large healthcare system, as this aligns with the scale of the patient volume.
Revenue Basis: Revenue is derived from Medicare reimbursements, which vary by service type (e.g., inpatient, outpatient, physician services) and geographic location. I’ll use national averages for Medicare expenditures per beneficiary.
Profit Margins: Profit margins depend on operating costs, which include labor, supplies, and administrative expenses. Margins for Medicare patients are typically lower than for commercial payers due to lower reimbursement rates.
Data Sources: I’ll use data from the Centers for Medicare & Medicaid Services (CMS) and other healthcare financial reports, such as those from the American Hospital Association (AHA) and KFF, to estimate revenue and costs.
Geographic Variation: Medicare reimbursement rates vary by state, but I’ll use national averages for simplicity unless otherwise specified.
Service Mix: The patient load includes a mix of inpatient, outpatient, and physician services, typical for a hospital or integrated health system.
Estimating Revenue
Medicare Spending per Beneficiary
According to CMS data, Medicare spending per beneficiary in 2020 ranged from $8,726 (Vermont) to $13,652 (Florida), with a national average of approximately $10,000–$12,000 per beneficiary annually, depending on the year and service mix.
For 2023, total Medicare spending was $1,029.8 billion for approximately 65 million beneficiaries, yielding an average of about $15,843 per beneficiary ($1,029.8 billion ÷ 65 million). This figure includes inpatient hospital stays, outpatient services, physician services, and prescription drugs.
Adjusting for inflation and cost trends, I’ll use a conservative estimate of $14,000 per Medicare beneficiary for 2025, accounting for a mix of traditional Medicare and Medicare Advantage patients.
Revenue Calculation
For 55,000 Medicare patients:
\[
\text{Revenue} = 55,000 \times \$14,000 = \$770,000,000
\]

Estimated Annual Revenue: Approximately $770 million.
Revenue Breakdown by Service Type
Hospital Expenditures: In 2023, hospital expenditures accounted for 37% of Medicare spending. For $770 million in total revenue, this translates to roughly $285 million for hospital services (inpatient and outpatient).
Physician and Clinical Services: These accounted for 25% of Medicare spending, or about $192.5 million.
Prescription Drugs: These accounted for 14% of Medicare spending, or about $107.8 million.
Other Services: The remaining 24% (e.g., home health, skilled nursing) contributes approximately $184.7 million.
This breakdown assumes the patient load includes a typical mix of services. If the organization specializes (e.g., only outpatient care), the revenue distribution would shift.
Estimating Profit
Operating Costs
Hospital Costs: According to Definitive Healthcare, the average hospital operating expense in 2022 was $230.5 million for an average net patient revenue of $223.7 million, suggesting expenses often exceed or closely match revenue.
Medicare Underpayment: The AHA reports that in 2023, Medicare reimbursed hospitals at 83 cents for every dollar spent, resulting in a 17% underpayment rate. For $285 million in hospital revenue, this implies costs of approximately:
\[
\text{Costs} = \frac{\$285,000,000}{0.83} \approx \$343,373,494
\]

Thus, hospital services alone could result in a loss of about $58.4 million annually for Medicare patients.
Physician and Other Services: Physician services and outpatient care may have slightly better margins, but Medicare reimbursements still typically fall short of costs. Assuming a similar 17% underpayment rate across all services for simplicity:
\[
\text{Total Costs} = \frac{\$770,000,000}{0.83} \approx \$927,710,843
\]

Total Operating Costs: Approximately $928 million.
Profit Calculation
Net Operating Margin:
\[
\text{Profit} = \text{Revenue} - \text{Costs} = \$770,000,000 - \$927,710,843 \approx -\$157,710,843
\]

Estimated Annual Profit (Loss): A loss of approximately $157.7 million.
Adjusting for Real-World Margins
Hospital Margins: KFF reports that hospital operating margins in 2023 averaged 5.2% for all payers but were lower for hospitals with high Medicare patient shares (e.g., 3.1% for rural hospitals).
Medicare-Specific Margins: Medicare patients typically yield negative or near-zero margins due to underpayment. For-profit hospitals may achieve slightly positive margins (e.g., 0.3% for 340B program drugs), but nonprofit and public hospitals often face losses.
Alternative Scenario: If the organization optimizes costs (e.g., through efficient staffing or participation in programs like 340B), it might reduce the loss. For example, assuming a 5% operating margin on $770 million:
\[
\text{Profit} = \$770,000,000 \times 0.05 = \$38,500,000
\]

However, achieving a positive margin with Medicare patients alone is challenging without commercial payer revenue to offset losses.
Key Factors Affecting Revenue and Profit
Payer Mix: Hospitals with a higher proportion of commercial payers (who pay 254% of Medicare rates on average) can offset Medicare losses. A facility serving only Medicare patients is likely to operate at a loss.
Medicare Advantage (MA): MA plans, which cover about half of Medicare beneficiaries, often have lower reimbursement rates and stricter utilization controls (e.g., prior authorization), reducing revenue and increasing administrative costs.
Geographic Variation: Revenue per patient varies significantly (e.g., $13,652 in Florida vs. $8,726 in Vermont in 2020). Higher-cost regions may yield more revenue but also face higher operating costs.
Service Intensity: Patients with chronic conditions or higher acuity (e.g., heart failure, diabetes) increase costs due to longer stays and more intensive care.
340B Program: Participation in the 340B drug discount program can boost profits for outpatient drug administration, with estimated profits of $1.9 billion across all 340B hospitals in 2016 for Medicare Part B drugs.
Limitations
Data Gaps: The exact service mix, facility type, and geographic location are unspecified, so national averages may not reflect local realities.
Cost Variability: Operating costs vary widely based on labor markets, facility size, and efficiency. The 17% underpayment rate is an aggregate estimate and may not apply uniformly.
Medicare Advantage Impact: MA plans’ lower reimbursements and administrative burdens could reduce revenue and margins further than estimated.
Time Lag: Data from 2023 and earlier may not fully reflect 2025 reimbursement rates or cost trends.
Final Answer
Expected Revenue: Approximately $770 million annually for 55,000 Medicare patients, based on an average of $14,000 per beneficiary.
Expected Profit (Loss): Likely a loss of $157.7 million annually, assuming Medicare reimburses 83% of costs. In an optimistic scenario with cost optimization, a small positive margin (e.g., $38.5 million) is possible but unlikely without commercial payer revenue or special programs like 340B.

According to this AI analysis, the Developer is the dumbest person on earth, for thinking he could make money in the Healthcare business, in The Villages.

It's simply amazing that someone so dumb, was able to amass a fortune that exceeds $4 BILLION dollars.

or he could afford the loss leader as a special marketing draw to the housing development side, which would be not unreasonable. . . given the arrogance of the hiring the puppets and using political ties to get favorable rulings in the FL gubmint, finding ways to upcode for more money is not an unreasonable stretch of belief in one's total control of the area. . .

seen many very successful business owners believe they can control way more than they actually can. .