Although there have been modest signs of economic improvement over the last several months, conditions are still less than optimal for many individuals and businesses throughout the country. The San Diego area is not immune to the economic challenges many are facing. One local business, the San Diego Hospice, was facing significant financial challenges in part due to federal investigations and Medicare concerns, which led the company to recently file for Chapter 11 bankruptcy protection.
This Chapter 11 filing is significant because the San Diego Hospice is reportedly one of the largest hospices in the country. According to a recent report, the hospice at times has over 1,000 patients. However, increased scrutiny of Medicare payments led to an indication that many of the hospice's patients - patients who were expected to live less than six months - were in fact staying at the hospice for a couple of years in some instances, and all while the government was footing the bill.
The hospice hopes to remain in operation throughout the Chapter 11 bankruptcy process, although many of the company's employees have already been laid off. In a further effort to reduce expenses and reorganize, the patient load has been decreased to around 600, but that decrease is also partly a result of some negative publicity due to the hospice's financial problems and the federal investigations.
Making the decision to file for bankruptcy is never easy, but the Chapter 11 bankruptcy process has many advantages for businesses that chose this route. The business has the option to maintain operations while at the same time attempting a reorganization of the company's business structure. The company can also attempt to come to an agreement with any creditors. In the end, Chapter 11 may be just what the San Diego Hospice needs in order to make a turnaround.
Source: Kaiser Health News, "San Diego Hospice Files For Bankruptcy," Randy Dotinga, Feb. 7, 2013