Valley Hospice of Arizona files for bankruptcy to write off nearly $ 2.5 million in debt
Valley Hospice of Arizona, Inc., recently deposit for bankruptcy protection against at least $ 2.49 million owed to more than 70 creditors. The bankruptcy petition was filed under subchapter V of Chapter 11, stating that the hospice owes less than $ 7.5 million, although a full amount was not disclosed.
Many creditors were unsecured, or those incurred without collateral. The company’s largest unsecured debts included Medicare overpayments, federal and state payroll taxes, employee health care benefit expenses and legal fees, as well as debts to technology vendors. , pharmacies and medical supplies / services, according to court documents.
The amounts disclosed and the statements of cash flows were not included in the supporting financial documents. The company withheld this information due to concerns that the published documentation could “influence the user’s conclusion on the financial position and the results of the operations of the company”, according to a statement signed by Rogelio Cruz, as chartered accountant of the hospice.
Administrator Christine Muturi Lewis signed on how to file bankruptcy petition. She was appointed to this post in 2016.
Chapter 11 bankruptcy filing typically allows an organization to develop a financial plan that will allow it to remain open and sustainable in the future, keeping control of business operations and under the oversight of the courts.
Based in Mesa, Arizona, Valley Hospice of Arizona provides chronic and terminal illness care, including skilled nursing home services. Total hospice income reached just under $ 2.7 million in 2020, operating expenses that year amounted to over $ 3.1 million. The company reported a loss of nearly $ 435,600 in 2020, according to documents filed with the court.
Medicare overpayments made up a significant portion of Valley Hospice of Arizona’s largest unsecured debt, amounting to approximately $ 1.3 million. Hospices operate within an aggregate payment system monitored by the United States Centers for Medicare & Medicaid Services (CMS). If a hospice exceeds the capitation rate, then it must reimburse the amount to CMS.
Hospice and hospice use reached 59.2% among those who died from Medicare in 2018, the second highest rate nationwide that year, according to the National Hospices and Hospices and Hospices Organization (NHPCO ). That topped the national average of 51.6% the following year in 2019, NHPCO reported.
The Better Business Bureau (BBB) ââin 2018 alleged that he received reports that the Valley Hospice of Arizona may have falsely declared ownership of an unaffiliated company and falsely advertised employment opportunities under a different company name. The office said the hospice had not responded to its requests.
According to the office’s website, it “does not make any representations or warrant that the information, content or other material on [its] the sites are precise. BBB asks users who submit content to affirm that any information contained in the content is accurate, but BBB does not verify the accuracy of information submitted by users.