Faced with rising debt and declining Medicare revenue, nursing home and long-term care hospital owner Vencor Inc., filed for federal bankruptcy protection yesterday.
The Louisville, Ky.-based company, which owns 300 nursing homes and 68 long-term care hospitals, filed for Chapter 11 protection in Delaware.
The company said it plans to renegotiate loans with banks in an effort to deal with more than $800 million in total debt, largely brought on from the deteriorating state of its nursing home operations.
Vencor's nursing home revenue stream has suffered from the government's effort to slow Medicare spending growth as part of the Balanced Budget Act of 1997.
The law phased in a payment system in which nursing homes are paid a set fee based on a patient's diagnosis, regardless of the length of admission. Historically, Medicare paid nursing homes a daily rate.
"It's not so much the hospitals as the nursing homes that have been impacted," said Susan Legg, administrator for Vencor Hospital Chicago-North.
Long-term hospitals provide medical care for patients suffering catastrophic or medically complex illnesses that require hospital stays of more than 25 days.
Often, such patients are on ventilators.
Pub Date: 9/14/99