Dive Brief:
- Parkview Adventists Medical Center owes $13 million to Central Maine Healthcare and an affiliate, Central Maine Medical Center, according to court documents. The hspital filed for Chapter 11 last month as part of a proposed takeover by nearby Mid-Coast Health Services.
- CMHC said its repayment is protected by 7-year-old security documents such as mortgage deeds, security agreements, etc. related to Parkview's Brunswick properties; Parkview contends that a proper security interest wasn't transferred by Parkview's board of directors and that the documents are therefore not enforceable.
- According to CMHC's objection to Parkview's motion to use cash collateral, Parkview owes CMHC close to $7 million for a promissory note and several contracts between the two organizations; and another $7 million for contracts with the Lewiston hospital.
Dive Insight:
Parkview terminated its contract for emergency services with Central Maine on the day it filed bankruptcy and signed with Brunswick-based Bluewater Emergency Partners. It also closed its emergency and acute inpatient care departments a few days after the filing. Chuck Gill, CMHC spokesman, said last month the organization would be reviewing all contracts and legal options to "protect the interests of Central Maine Healthcare." The final Parkview bankruptcy hearing is scheduled for July 27 in Portland Maine.
There were 16 hospital bankruptcy filings last year across the U.S. and a total of seven so far this year, according to Value Healthcare Services, which focuses exclusively on healthcare bankruptcy receivables. The company points to increased prices for medical care and smaller health networks. Steven Michaud, president of the Maine Hospital Association said, "It's happening nationally at a rapid pace, just because of the strains that are going on. And it will continue."