Huge healthcare firm with $500million in assets and staffing across 150 US hospitals files for bankruptcy

A HEALTHCARE firm with $500million in assets has filed for Chapter 11 bankruptcy following the shutdown of its business operations.

Medical staffing firm American Physician Partners cited economic issues and a loss of revenue as its reasons for filing for bankruptcy.

The company is planning to use the recent filing “to complete the orderly wind-down of its business affairs following the transition of its clinical operations,” according to Fierce Healthcare

In the petition filed Monday in Delaware, the medical firm listed up to $500million in assets while dealing with as much as $1billion in liabilities.

The company had over 150 contracts with different emergency departments and hospitals before it shut down operations.

In a statement released over the summer, the company said that they planned to spread the contracts to over 100 sites with over 2,500 physicians for a seamless adjustment.

“Effective July 31, 2023, the company had transitioned all its clients to other strategic emergency medicine companies or insourced with the respective hospitals or health systems,” APP said in the bankruptcy announcement.

“Through the transition, there was no interruption to patient care, and APP satisfied or arranged for the satisfaction of significant obligations of the company.”

The company folded after it failed to reach a deal with the hospital staffing firm SCP Health, according to Bloomberg.

American Physician Partners claimed in court documents that it could not find a potential acquirer, equity investor, or replacement lender.

John DiDonato, APP’s chief restructuring officer, also blamed the No Surprises Act for the downfall of the company.

“Although the legislative policy behind the No Surprises Act is sound, the regulatory implementation of the No Surprises Act was problematic, effectively shifting the balance of power in payment disputes too far in the favor of insurance companies (payors) and enabling them to significantly delay and unilaterally reduce or deny payments,” DiDonato wrote.

“Of the eligible claims the company submitted through the independent dispute resolution process, only a small portion has been resolved, and of those that were resolved, many remain unpaid by health insurers.”

The company has dismissed more than 2,500 of its employees.

There are currently only 27 employees left to manage the company’s transition.