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Advisen Healthcare Front Page News - Tuesday, August 1, 2017

Bankrupt ER operator Adeptus, based in D-FW, plans patient refunds to avoid 'bad publicity'
Bankrupt ER operator Adeptus, based in D-FW, plans patient refunds to avoid 'bad publicity'
Publication Date 07/29/2017
Source: Dallas Morning News (TX)

July 29--A North Texas bankruptcy court has given the OK for the nation's largest operator of freestanding emergency rooms to refund up to $250,000 to an undisclosed number of patients.

Lewisville-based Adeptus Health filed for bankruptcy in April amid a dramatic decline in the company's earnings, the sudden departure of top executives and a consumer lawsuit that alleged fraud.

Judge Stacey G.C. Jernigan this week authorized Adeptus to refund patients owed money before the bankruptcy. The company had asked for permission to refund eligible patients to avoid "bad publicity."

"Unhappy patients may cause serious economic harm" to the business, Adeptus attorneys wrote in a motion filed in May in the Northern District of Texas court.

The company feared that disgruntled consumers would tell their family, friends or insurer that they were financially harmed and warn others to avoid the facilities. "Delayed or nonpayment of patient refunds is a growing threat to the business of the estate," its motion said.

It's not uncommon for patients to overpay at health care facilities. The issue can occur when the deductible or copay -- the amount the patient pays out-of-pocket -- is estimated incorrectly by the provider. The patient gets billed for the wrong amount, often before health insurance has paid its part.

Patients are entitled to a credit when they overpay, and an undisclosed number of Adeptus patients either requested refunds or had checks that weren't cashed before bankruptcy was filed.

The company estimates the amount of uncashed checks to be around $15,500, and the total amount of refunds could be as high as $250,000.

Since it was formed in 2002, Adeptus has opened 99 facilities with a staff of 3,800 across five states. It treated about 408,000 patients in 2016.

Adeptus experienced "impressive growth," court documents say. It added five fully operational hospitals to its portfolio in the past three years and formed partnerships with leading health systems in Arizona, Colorado and Texas, including the University of Colorado Health in Colorado Springs and Texas Health Resources in Dallas.

Increased competition, declining revenue, significant working capital demands and revenue cycle management issues led to a significant strain on the company's liquidity, court documents said.

This week, the company estimated its value at about $150 million to $180 million, below what two of its largest shareholders have argued that it should be, according to Westlaw, an arm of Thomson Reuters focused on legal issues.

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