Borrego Health files for Chapter 11 bankruptcy, clinics will remain open
The Borrego Community Health Foundation (Borrego Health) has filed for Chapter 11 bankruptcy, officials said Monday.
Borrego’s legal deposit is motivated by August 19e notification from the State of California Health and Human Services Agency – Department of Health Care Services (DHCS) that the State intends to reimpose its 100% suspension of payment on all Borrego Health Medi-Cal services starting September 29.
The Chapter 11 process will prevent the DHCS action from taking effect while resolving ongoing state and federal investigations. The action supports Borrego’s mission to protect access to local health care and meet the unique needs of the communities they serve.
A case filed under Chapter 11 of the United States Bankruptcy Code is often referred to as a “reorganization” bankruptcy. Usually, the debtor remains “in possession”, has the powers and duties of a trustee, can continue to operate its business and can, with court approval, borrow new funds. A plan of reorganization is proposed, creditors whose rights are affected can vote on the plan, and the plan can be confirmed by the court if it obtains the required votes and meets certain legal requirements.
– US Courts – Chapter 11 Basics of Bankruptcy
During the Chapter 11 proceedings, Borrego Health will continue to operate in the normal course of business, officials confirmed.
“Patients will have the same access to their health care provider and services without disruption of care. Borrego Health has also taken the necessary steps to ensure that employees do not miss a paycheck and continue to receive a benefits package. Borrego Health will continue to pay salaries and fees, purchase supplies and equipment, and ensure access to quality health care during this process.”
Borrego Health provides health services throughout the Coachella Valley. The company has clinics in Cathedral City, Palm Springs, Desert Hot Springs, Indio, Thermal, and last month opened its new clinic in Coachella.
“Unfortunately, the misguided action of DHCS puts patients at risk and has led us to make a difficult decision to protect our patients and their access to care,” said Borrego Health Chief Executive Officer Rose MacIsaac. “Our mission to provide high quality local access to those who need it most drives us forward and this filing with the Court will allow us to continue to provide care as we do today while securing the future. health care for our patients.”
Borrego Health has clinics throughout Southern California, from San Bernardino County to San Diego County. In 2021, Borrego Health served over 120,500 patients and recorded over 463,000 visits.
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