Florida Healthcare Agency Among Creditors Seeking Payment from Steward Health Care System Bankruptcy

Florida Healthcare Agency Among Creditors Clamoring for Payment from Steward Health Care System in Bankruptcy Case

A public Florida healthcare agency is among the more than 100,000 creditors seeking payment from hospital company Steward Health Care System, which filed for bankruptcy protection in May. Steward owes nearly $14.5 million to Florida’s Agency for Health Care Administration for unspecified goods or services.

The largest physician-owned healthcare network in the country, Steward operates 31 hospitals, including eight in Florida. Florida is ranked 14th on the list of Steward creditors with “unsecured claims,” with Change Healthcare, a subsidiary of United Health Group, topping the list with over $70 million owed.

Steward attributes the debt to Florida as “trade debt,” similar to credit card debt, with no collateral tied to the debt. This means that Florida may not receive full payment during the bankruptcy proceedings.

According to law professor Scott Norberg, creditors with secured claims, tied to property or company assets, have higher priority and will be paid first. Creditors with unsecured claims, like Florida, may only receive a fraction of what is owed.

Steward, which serves over two million patients annually and generates more than $6 billion in revenue, has over $9 billion in total liabilities, including loans, unpaid bills, and employee wages.

The bankruptcy court has yet to set a deadline for creditors to file claims, and Steward is in the process of reorganizing its debt and plans to sell all of its hospitals. A committee of unsecured creditors will be formed to review Steward’s financial transactions and future spending.

Florida’s Agency for Health Care Administration has not commented on the situation or specified the goods or services provided to Steward. The outcome of the bankruptcy proceedings will determine how much, if any, Florida will receive in payment.