CenterWell, owned by Humana, is buying The Villages Health in Orlando, Florida, according to a notice from the healthcare provider for The Villages retirement community, which spans three counties in Florida.
The move is a strategic restructuring to preserve the business' day-to-day operations amid a Chapter 11 bankruptcy.
In a July 3 letter to patients, The Villages Health CEO Bob Trinh indicated the bankruptcy is tied to a Medicare billing overpayment of hundreds of millions of dollars.
“As you may know, in December 2024, The Villages Health (TVH) self-reported a Medicare billing discrepancy to relevant U.S. government agencies. At the time and as part of our commitment to transparency, TVH also communicated this news to its entire patient population,” Trinh said in the letter.
“Since then, TVH has been working diligently with the Medicare program toward a resolution with the U.S. government, estimated at hundreds of millions of dollars in overpayments and likely significant accompanying penalties,” the letter read.
Separately, TVH has been in discussions with multiple parties for the past year and a half about potential transactions or acquisitions, he said.
“I first want to reassure you that TVH is not going away,” Trinh said.
The work toward a resolution with the U.S. government continues and is independent of, and being conducted separately from, the transaction with CenterWell, TVH said.
The health systems will have the same doctors and clinicians, he said. Patients will have continued access to their current insurance provider, due to CenterWell’s payer-agnostic structure, he said.
WHY THIS MATTERS
TVH voluntarily filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Middle District of Florida, Orlando Division. It filed customary First Day Motions seeking relief on an immediate basis to minimize any adverse delays or disruptions to its daily operations.
In addition, after extensive negotiations, CenterWell Senior Primary Care, a senior-focused value-based primary care provider, entered into a "stalking horse" Asset Purchase Agreement with TVH. This means that CenterWell's bid sets a minimum price for the assets, which will then be auctioned off.
A court order approving the sale, following an auction process during which other parties may submit an offer to purchase TVH's assets, will be a condition of the transaction moving forward and closing, TVH said.
The agreement provides for CenterWell, the healthcare services business of Humana, to acquire TVH's assets as a going concern, TVH said.
THE LARGER TREND
The Villages Health focuses on primary and specialty care through eight primary care centers and two specialty care centers.
TVH has been providing care to residents of North Central Florida, The Villages and surrounding communities for the past 13 years. Many of its more than 55,000 patients are beneficiaries of Medicare and Medicare Advantage plans.
ON THE RECORD
"TVH is a clinically excellent healthcare system. We believe this plan of reorganization and planned transaction with CenterWell is in the best interests of our patients, physicians, other clinicians, employees, partners and community members, and will ultimately result in a more promising future," said Dr. Elliot Sussman, chairman of the board and physician founder of The Villages Health.
"This was by no means an overnight decision, nor has it been an easy one. We want to reassure our community that there will not be any effects on patient care experienced by our patient population," Trinh explained.
Email the writer: SMorse@himss.org