HPR Lowers Estimate of Ability To Pay Creditors, Citing Increasing Medical Expenses
Health Plan of the Redwoods will be able to pay creditors "significantly less" than earlier estimates, according to the bankrupt HMO's liquidation plan, the Santa Rosa Press Democrat reports (Rose, Santa Rosa Press Democrat, 10/16). HPR filed for Chapter 11 bankruptcy protection on May 31 in the face of an $8 million budget deficit. HPR officials estimate that the health plan owes $38.7 million to creditors, which include local hospitals, physicians and other health care professionals (California Healthline, 9/11). Filed in U.S. Bankruptcy Court, the liquidation plan indicates that HPR could pay between 23 and 37 cents for each dollar it owes, down from initial estimates of 48 to 50 cents per dollar. HPR officials said the lower estimate is related to continuing increases in medical expenses. The actual amount that HPR will be able to repay may not be determined until January, the deadline for HPR enrollees to file medical and legal claims related to HPR's decision to cease operations. In the next two weeks, HPR's creditor committee will meet to review the liquidation plan. The Press Democrat reports that the committee could recommend that the bankruptcy court accept, reject or amend the plan. If the court approves the plan, creditors then must vote to accept it. If creditors approve the plan, distribution of HPR's assets likely will begin late next year (Santa Rosa Press Democrat, 10/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.