UnitedHealthcare has accused the Morse family of raking in millions of dollars from The Villages Health prior to the sudden bankruptcy of the “Marcus Welby” physician service.
A judge in bankruptcy court in Orlando has been asked to grant an emergency request for financing sought by The Villages Health, which has pleaded for a $46 million financial lifeline to continue to serve its 55,000 patients and pay its 900 employees at clinics located throughout Florida’s Friendliest Hometown. The judge is being asked to approve the financing request, despite objections from UnitedHealthcare, which has been The Villages Health’s longtime Medicare Advantage partner.
In a court document, UnitedHealthcare claims that it had taken seven weeks since the bankruptcy filing for it to be disclosed that The Villages Health paid out in a “three-year period from 2022 to 2024, a very substantial portion of $183 million, consisting of $64.2 million in ‘tax-related distributions’ and $118.8 million to pay down a supposed ‘line of credit with its major shareholder’ – to members of the Morse family, who own and control The Villages through various corporate entities.” UnitedHealthcare also charges that The Villages Health “claims not to know” how much money it distributed to shareholders in 2020 and 2021. UnitedHealthcare further contends that the $118.8 million purportedly spent paying down the line of credit was actually “disguised equity distributions” paid to the Morse family. During those years, The Villages Health also was paying roughly $10 million in annual rent to The Villages Operating Co. for the use of the clinics.
In the court document, UnitedHealthcare revealed that it only very recently learned that the $46 million in funding to keep The Villages Health in operation had been offered by The Villages, at a 12 percent interest rate. UnitedHealthcare rushed to offer its own $46 million to prop up The Villages Health, due in part to UnitedHealthcare’s apparent desire to be granted unfettered access to scrutinize the books at The Villages Health. UnitedHealthcare charges that after it made its financing pitch, The Villages went “silent” for a week, before returning to the table and offering to cut its interest rate from 12 to 10 percent.
The Villages Health CEO Bobby Trinh announced in July that The Villages Health was seeking bankruptcy protection. The bankruptcy is intertwined with “erroneous Medicare coding” that could force The Villages Health to repay as much as $360 million to the U.S. government. Trinh was paid a $200,000 “retention bonus” the day before the bankruptcy announcement.
UnitedHealthcare contends it was caught off guard by the bankruptcy filing It strenuously objects to the proposed sale of The Villages Health to Humana’s Centerwell. The Villages is hoping to close the sale to Humana in early October.
Nearly 15 year ago, The Villages announced a comprehensive effort to return patient care to a “Marcus Welby” approach to medicine, harkening back to a simpler time when patients much more intimately conversed one-on-one with their doctors. The Villages eventually backed off references to the kindly doctor portrayed by Robert Young in the “Marcus Welby M.D.” television show which debuted in 1969. It was said that the show’s creators objected to the use of the fictional character for marketing purposes.