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Sixth chain joins list of bankrupt providers
By KRIS HUNDLEY
© St. Petersburg Times, published June 24, 2000
Genesis Health Ventures Inc. this week became the sixth nursing home operator in Florida to file for bankruptcy protection. Like its predecessors, Genesis blamed its financial problems on deep cuts in Medicare reimbursements.
Genesis, based in Kennett Square, Pa., has 21 nursing homes in the state, including five in Pinellas County and one in Hillsborough County.
Five other national nursing home chains have filed to reorganize in the past year. There are now 144 Florida nursing homes, accounting for about 23 percent of the total licensed beds, operating under Chapter 11 bankruptcy reorganization. Of those, 26 facilities, with just over 4,000 beds, are in the Tampa Bay area.
Genesis, which listed $2.33-billion in debts and $2.46-billion in assets, said court protection would allow its more than 300 nursing homes to continue caring for patients.
None of the state's nursing homes currently operating under Chapter 11 have closed or been forced to relocate patients, said Pat Glynn, spokesman for Florida's Agency for Health Care Administration. One company, NewCare Health Corp. of Atlanta, has sold or is in the process of selling its six nursing homes since it filed Chapter 11 in June 1999.
"We've done hundreds of financial monitoring visits to these facilities to see if staff are there, if they're being paid and if the home is getting supplies," Glynn said. "Though we have to prepare for the worst case scenario of a closing, it hasn't happened yet."
The trade association representing Florida nursing homes has been pressing the state to increase Medicaid reimbursements and to address legal liability issues that have led to multimillion-dollar judgments against owners. The Florida Health Care Association has tried for the past three years to get the Florida Legislature to cap lawyers' fees or limit medical malpractice lawsuits.
Ed Towey, spokesman for the trade group, said nursing homes' problems are compounded by the skyrocketing cost of liability insurance. "We'll have to have a system meltdown and have facilities close" before there's action, Towey said.
While nursing homes blame cuts in Medicare, which account for about 20 percent of their revenues, other observers say bad management is to blame. John Noble, who tracks health care stocks for the Agency for Health Care Administration, said the companies in trouble today were growing rapidly and loading on debt in recent years.
Said Noble, "Medicare cuts didn't kill these companies. They were just the straw that broke the camel's back."
Nursing home bankruptcies
Nursing home companies in bankruptcy reorganization and number of Tampa Bay area facilities:
Source: company reports
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