Florida's public health care system is among more than 100,000 creditors seeking payment from hospital company Steward Healthcare System, which filed for bankruptcy protection in May.
Mr. Steward owes the Florida Agency for Health Care Administration, which regulates hospitals and other medical facilities in the state, about $14.5 million for unspecified goods and services. The company is the nation's largest physician-owned health care network, operating 31 hospitals, including eight in Florida.
Florida ranks No. 14 on Steward's list of top 30 “unsecured” creditors, according to court documents. Change Healthcare, a subsidiary of United Health Group, tops the list with more than $70 million.
Steward said the company owes the state of Florida “trade debts,” or money the company has purchased from state officials for goods and services. Think of it like credit card debt. Because debts have no real estate or other collateral, they are usually not a top priority in bankruptcy court.
And there's a good chance Florida won't be paid in full.
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Scott Norberg, a law professor at Florida International University, said creditors with secured claims, or loans tied to real estate or other company assets, typically have higher priority during bankruptcy proceedings and are paid in full. It is said that it will become. He said that after Steward pays operating expenses and repays creditors with secured claims, any remaining funds will be distributed to creditors with unsecured claims, such as the state of Florida.
Steward said in court documents that it treats more than 2 million patients a year and collects more than $6 billion annually. CNN reports that the company's total debt is more than $9 billion, including loans, long-term leases, unpaid vendor and supply invoices, and unpaid employee wages and benefits. .
Steward Health Bankruptcy: How Does the Process Work for Creditors?
Creditors with unsecured claims are often paid “a few cents on the dollar” depending on what is negotiated in court, Norberg said. This means Florida taxpayers will likely not be able to recover the full amount owed.
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The Florida Department of Health Services did not immediately comment on the situation or provide details about the products or services it provided to Steward.
As of May 14, the bankruptcy court has not yet determined a deadline for creditors to file claims.
Steward filed for Chapter 11 bankruptcy protection on May 6 and is proceeding with debt consolidation. As part of that process, the company will expand all of its hospitals, including Palmetto General Hospital in Hialeah, North Shore Medical Center in North Miami-Dade, Coral Gables Hospital, Hialeah Hospital, and Florida Medical Center in Lauderdale Lakes. I'm thinking of selling it.
Mr. Norberg said the court ultimately established an unsecured creditors committee (usually made up of a company's seven largest unsecured creditors) to review Steward's previous transactions and “the future funding of the business.” He said he would consider how it would be used.
