By: Adria Mulrooney
Share This Post
Leading Cancer Treatment Firm Files Bankruptcy
The leading operator of cancer treatment facilities, 21st Century Oncology has filed for Chapter 11 bankruptcy. The leading cancer treatment firm claims that its future is unclear, due to recent political up heaves, along with modifications to the method in which insurance is reimbursed.
Founded in 1983, 21st Century Oncology, a leading cancer treatment firm, was created by a group of doctors and traded publicly as Radiation Therapy Services prior to an acquisition in 2008, which placed it in the realm of Vester Capital Partners for approximately $1 billion. Plans to return to the stock market in the year 2014 were foiled when the company generated $325 million via a primary investment from Canada Pension Plan and other resources.
The company, a leading cancer treatment firm based out of Fort Myers, Florida, anticipates that there will be no major effect to the more than 175 cancer treatment centers that are housed throughout 17 of the United States and some centers in Latin America.
A statement rendered by Paul Rundell, interim chief executive officer states that there has been an agreement between the bondholders and the lenders, which would decrease the amount of debt for the operation by $500 million. Within the agreement, lenders for the company have committed to invest the sum of $75 million into the restructured business.
Funds for the investment agreement are connected to Beach Point Capital Management, Oaktree Capital Management, JP Morgan Investment, HPS Investment Partners, Roystone Capital Management and Governors Lane, based upon filings in the court system.
Blame is placed on decreasing stages of revenue affiliated with each treatment, compliance costs, electronic records regulations, and litigation and legal costs are the culprits that led to the filing, according to Rundell.
Nearly $55 million has been paid forward by the company to clear settlement of allegations that government programs were billed for services that bared no medical necessity, based upon a court filing by Rundell. The settlement was no indication or admission of guilt by the company. Other allegations of a data breech that effected more than 2 million patients is currently under investigation as well.
In the court document that was filed, Rundell said, “A changing political landscape has injected uncertainty into the health insurance market.”
The 2010 Affordable Care Act, dubbed Obamacare, presented abundant changes to the healthcare platform in the United States. Republican parties and President Donald Trump have voiced plans to replace the healthcare market. There were more than 19 million Americans that acquired insurance via Obamacare.