The Villages Health System is paying $150,000 per month to its new restructuring officer as the beleaguered healthcare provider tries to navigate its way through bankruptcy and a possible sale.
The Villages Health announced its bankruptcy on July 3 as it also acknowledged “a Medicare billing discrepancy” that could mean that The Villages Health will have to repay the government as much as $360 million. Court documents have revealed that The Villages Health needs to borrow $24 million for an emergency cash infusion to pay its doctors and keep the lights on.
In May, with the writing apparently on the wall, The Villages Health reached out and hired Neil Luria as its chief restructuring officer. Luria is superbly credentialed in his field, operating the firm SOLIC Capital Advisors LLC.
“SOLIC has a wealth of experience in providing restructuring advisory services and enjoys an excellent reputation for services it has rendered in large and complex Chapter 11 cases on behalf of debtors and creditors throughout the United States,” The Villages Health said in a recent court filing.
Luria’s compensation for serving as chief restructuring officer is $150,000 per month. In addition, SOLIC will be paid “a deferred restructuring fee of $500,000” at the “closing of a sale of the assets” of The Villages Health. SOLIC also “received on a pre-petition basis $1,020,307.54 related to its pre-petition work on behalf of the Debtor,” according to a document on file in bankruptcy court. In addition, SOLIC “currently holds a retainer in the amount of $523,839.”
Luria’s assignment appears to be to unload The Villages Health on Humana’s CenterWell. United HealthCare is objecting to The Villages Health’s “hurried” sale to Humana’s CenterWell. United HealthCare, which began an exclusive partnership with The Villages Health in 2013, contends it was surprised by the news of The Villages Health’s bankruptcy.
All of this is made more complicated by the anxiety surrounding the upcoming Medicare and Medicare Advantage enrollment period which begins in October.
There are nearly 60,000 patients receiving care at The Villages Health, the majority of whom are participants in Medicare Advantage plans. They receive care at 10 primary and speciality care clinics located throughout The Villages. All of the buildings are leased.
A statement of ownership on file with the court clearly shows that the owners of The Villages Health System are The Villages Holding Company and E.J. Sussman.
Elliot J. Sussman, who bought a home in The Villages in 2011 for $1.2 million, was integral in the inception of The Villages Health and peddling the “Marcus Welby” approach to personalized care. Thousands of Villagers lined up to be a part of The Villages Health and to this day, the vast majority indicate they are pleased with the level of care they are receiving.