Some of our Escondido readers may have seen a recent post here detailing the bankruptcy filing of the San Diego Hospice, one of the largest hospices in the country. The business filed for Chapter 11 bankruptcy in February, with what appeared to be an original intention to make some changes and continue on in operation. However, it does not look like that is an option any longer, and the business will be moving toward a complete shutdown. And, according to a recent report, this comes even as it has been revealed that an endowment fund of nearly $22 million exists as a separate entity to support the hospice.
The hospice was founded as a non-profit organization, but as the previous post noted the business went through an audit by federal authorities last year after there were some questions about the hospice's admissions process. The audit apparently found that the hospice was being reimbursed with federal funds for patients who did not qualify. As a result, the hospice began to slash the number of patients admitted, and it appears that the negative publicity may also have had an adverse effect on the number of potential patients. This dashed hopes of keeping the business in operation and now the hospice will close.
The $22 million endowment fund will remain, however, for the time being. Strangely enough, the endowment fund's board is the same as the board of the hospice, but reports indicate that the millions cannot be used to sustain the hospice. It is unclear want will happen to the money.
A Chapter 11 bankruptcy is usually intended to allow a company time to reorganize and come to terms with creditors on how to repay business debt. Unfortunately, these plans do not always materialize in a sustainable solution.
Source: U-T San Diego, "Hospice endowment not mixed in with bankruptcy," Jeff McDonald, March 12, 2013