Major healthcare provider files for Chapter 7 liquidation

The healthcare sector has faced economic problems over the last two years with rising labor and operating costs driven by inflation, increased liability insurance rates, as well as a decline in reimbursement rates.

These challenges have led to a higher rate of bankruptcy filings in the industry, with 79 cases in 2023 and 57 in 2024, after averaging 42 bankruptcy filings each year from 2019 through 2022. Within those numbers, 12 hospital companies filed for bankruptcy in 2023, while five filed in 2024.

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Major healthcare provider Prospect Medical Holdings on Jan. 11, 2025, filed for Chapter 11 bankruptcy protection with plans to reorganize certain medical assets, sell two medical centers in Rhode Island, and divest Pennsylvania assets through its case.

Prospect continued having problems and won bankruptcy court approval to close its two remaining Crozer Health hospitals in Pennsylvania — Crozer-Chester Medical Center in Chester, Pa., and Taylor Hospital in Ridley Park, Pa. — after failing to find a buyer for the properties.

Prospect employed about 12,600 workers and owned and operated 16 acute care and behavioral hospitals in California, Connecticut, Pennsylvania, and Rhode Island, providing a wide range of inpatient and outpatient services.

Healthcare companies file for bankruptcy protection

Landmark Holdings of Florida LLC, the parent company of six Landmark Hospital specialty hospital facilities, filed for Chapter 11 bankruptcy on March 9 to reorganize its businesses that are located in three states in the Midwest and South.

Also, health care provider Michigan Health Clinics P.C., which operates three medical clinics, filed for Chapter 11 bankruptcy protection on April 17, 2025, to reorganize its debts.

Sometimes, financial distress is too great for a healthcare company to survive, and it is forced to file for Chapter 7 liquidation.

Physician-led staffing firm NES Health Services PC filed for Chapter 7 bankruptcy on Feb. 21 to wind down and cease operations after failing to pay emergency department doctors for months at about 35 hospitals nationwide.

Home healthcare and hospice provider Intrepid USA files Chapter 7 bankruptcy.

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Intrepid USA liquidates in Chapter 7 bankruptcy

And now, huge home healthcare and hospice provider Intrepid USA filed for Chapter 7 bankruptcy liquidation to wind down its affairs.

The Dallas-based healthcare provider filed its petition in the U.S. Bankruptcy Court for the Southern District of Texas on May 29, 2025, listing $1 million to $10 million in assets and about $88 million in debts.

More bankruptcy:

The healthcare provider's phone lines and website were not operating for comment.

Intrepid USA, which was founded in 1990, has struggled financially for decades, as it filed for Chapter 11 bankruptcy on Jan. 29, 2004, before distressed debt specialist Lynn Tilton's Patriarch Partners acquired control of the company.

Patriarch Partners in July 2024 sold Intrepid to CenterWell Health Services for about $15 million as part of Tilton's Zohar Funds bankruptcy case, Law360 reported.

After the sale, Intrepid agreed to pay a $3.85 million fine to the U.S. Department of Justice as a result of violations of the False Claims Act, which protects government programs like Medicare from fraudulent billing practices, according to an Aug. 20, 2024, Justice Department statement.

The department alleged Intrepid knowingly submitted claims to Medicare for home healthcare services for patients who did not qualify for the Medicare home healthcare benefit or where services did not qualify for Medicare reimbursement.

Intrepid also knowingly submitted claims to Medicare for patients who did not qualify for the hospice benefit.

All of the violations occurred between 2016 and 2021, the department said. They also weren't the first government agency fraud violations for Intrepid.

In October 2003, Intrepid subsidiary, Intrepid of North Carolina, paid a $685,000 settlement for alleged Medicaid fraud, according to McKnights Long-Term Care News at the time.