Healthcare provider chain files for Chapter 11 bankruptcy

Financial distress continues to drag down America's healthcare providers, as companies commence closing locations, sell off facilities, launch out-of-court restructurings, and file for bankruptcy.

Healthcare providers have dealt with financial issues, such as rising labor and operating costs driven by inflation, a decline in reimbursement rates, and increased insurance liability premiums.

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These economic 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, according to data from healthcare restructuring advisory firm Gibbins Advisors.

Within those statistics, 12 hospital companies filed for bankruptcy in 2023, while five filed in 2024.

In the most extreme situations, a health care provider might be in such dire financial shape that its only option is to file for Chapter 7 bankruptcy 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.

Also, huge home health care and hospice provider Intrepid USA filed for Chapter 7 bankruptcy liquidation to wind down its affairs.

The Dallas-based health care 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.

Healthcare providers reorganize in bankruptcy

In most cases, healthcare providers are able to restructure debt, and sometimes sell their assets, in a Chapter 11 reorganization, and continue operating after emerging from bankruptcy.

For example, 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.

In a larger bankruptcy case, health care 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 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.

Sound Vision Care files for Chapter 11 bankruptcy protection.

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Sound Vision Care files for bankruptcy protection

Finally, New York-based healthcare provider chain Sound Vision Care Inc. and six affiliates filed for Chapter 11 bankruptcy to reorganize their business.

The Riverhead, N.Y.-based vision care chain filed its petition in the U.S. Bankruptcy Court for the Eastern District of New York on June 23, listing $50,000 to $100,000 in assets and $1 million to $10 million in liabilities.

More bankruptcy:

Sound Vision Care's affiliated entities that filed petitions include SVC of Fresh Meadows, SVC of Manhasset, SVC of East Setauket, SVC of Southold, SVC of Riverhead, and SVC of Coram.

Among the top creditors is Inadvance Capital, owed disputed merchant cash advance loans totalling over $49,000, according to petitions.

The debtor indicated in its petition that funds would be available to distribute to unsecured creditors.

The debtor did not reveal a reason for filing for bankruptcy in the petition.

The vision care provider chain lists eight locations on its website, including Bensonhurst, Fresh Meadows, Manhasset, Medford, Murray Hill, Riverhead, Southold, and Stony Brook, N.Y.

Sound Vision Care provides eye and vision exams, contact lens exams, hard-to-fit contacts, gentle vision shaping system, computer vision, and sunglasses services.