Adeptus Health acquired by NYC hedge fund
- Six months after offering financial assistance to freestanding emergency room operator Adeptus Health, New York City-based Deerfield Management is acquiring the troubled company, according to Becker’s Hospital CFO Report.
- Adeptus filed for Chapter 11 bankruptcy in April, citing the strain of investments aimed at expanding the company’s facility footprint.
- The Deerfield takeover marks Adeptus’ emergence from bankruptcy proceedings. As a first step in reorganization, Adeptus CFO Frank Williams was appointed chief executive officer of the Lewisville, Texas ER operator.
Deerfield Management, a hedge fund, acquired $212.7 million in debt from Adeptus in April, committing to providing $45 million in debtor-in-possession financing for the company. At the time, Adeptus had $8 billion in assets.
The company’s facilities remained in operation during the bankruptcy period.
Studies have shown a drop in the number of ER visits in states that have expanded Medicaid under the Affordable Care Act. While a provision in the law requiring doctors to provide free preventive services could feed hospital ER coffers, it’s unlikely to benefit ER companies.
Earlier this year, a Washington Post story cast light on the high cost of freestanding ER services. One patient, for example, was billed more than $5,000 for a cut requiring five stitches. An Annals of Emergency Medicine study, on which the Post story was based, found ER patients paid as much as 10 times more than urgent care patients for like diagnoses.
There are currently more than 400 freestanding ERs operating in 32 states. They compete with urgent care, retail clinics and other on-demand facilities that that have sprung up in recent years in response to consumer demand for more convenient and budget-friendly care choices.
- Becker's Hospital CFO Report Hedge fund takes over Adeptus Health