The Villages Health System is up for sale this week after previously filing for Chapter 11 bankruptcy over the summer. However, the sale has been met with several objections from insurance companies that have accused TVH of defrauding Medicare.
In July, TVH filed for bankruptcy. According to its website, the company has 55,000 patients and operates eight primary care centers and two specialty care centers. Court documents show Centerwell, a company owned by the insurer Huamana, is expected to purchase TVH. It placed a bid of $50 million, the minimum price offer for an auction.
A judge is scheduled to consider approving the sale, Wednesday in a sale order hearing at a U.S. Bankruptcy Court in Orlando.
However, in August, United Healthcare expressed concerns with the court over a conflict of interest between TVH and its debt financier, or the company that has agreed to finance TVH as it operates through bankruptcy.
The debt financier in this case is a company called PMA Lender LLC, which, according to Federal Reserve documents, is a subsidiary of Citizens First, the bank of The Villages.
In its August filing, United attorneys said “the estate and creditors clearly have an interest in maximizing the proceeds of the sale of the company and the value of litigation claims against insiders and affiliates.”
Ultimately, its concern is that TVH is managing its own bankruptcy, rather than an independent trustee. Theresa Radwan teaches bankruptcy at Stetson University. She said that isn’t necessarily unusual.
“The challenge, of course, is that that also means that if there's a lot of insider deals going on, the person who is running the bankruptcy has a lot of control and is also benefiting from that,” she said. “Essentially, United Healthcare is asking the court to say ‘no’ to that and not allow them to go forward with this particular debt financing.”
United’s mistrust comes after several years of being overbilled by TVH. Court documents show TVH received $350 million in overpayments by adding diagnostic codes to patient files through Medicare, resulting in overpayments by insurance companies. UnitedHealth said it was burdened with the majority of those overpayments. According to United Healthcare’s court filings, TVH used a large portion of that money, $183 million, to pay down a line of credit with its majority shareholder – members of the Morse family, who own and operate The Villages.
Blue Cross and Blue Shield of Florida, owned by Florida Blue, also filed its own objection, stating that it, too, had been overbilled by TVH to an amount of $25 million over four years. Florida Blue said that in 2024 alone, those overpayments added up to $8 million.
While the sale order is scheduled for this week, Radwan said that Chapter 11 cases can take at least a year to sort out, and that could disrupt a patient’s quality of care.
“We hope not, but obviously, there's going to be some disruption,” she said.
Bankruptcy cases can cause employees to seek other lines of work if trust in the company falters, Radwan said.
“There's almost always going to be some impact. But the hope is that, and this is where things like debt financing and such come in, if employees know they're going to get paid, they might not leave,” she said.
