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Just three years after opening its doors, San Diego’s only proton therapy center is seeking chapter 11 protection, the San Diego Union-Tribune reported on Friday. The investment group that owns the $220 million state-of-the-art facility on Summers Ridge Road filed on March 1 under chapter 11 of the U.S. Bankruptcy Code, stating in court papers that the center “has not operated on a profitable or even a break-even basis.” The facility is known throughout the region as the Scripps Proton Therapy Center and is operated under contract by the Scripps Clinic Medical Group, which has no ownership stake in the Mira Mesa operation. At a hearing in Delaware bankruptcy court scheduled for Friday, owner California Proton Treatment Center will ask a judge to approve a $16 million short-term loan to pay for continued operations while a restructuring effort proceeds. “Our doors will remain open to administer highly-specialized cancer therapies, and a Patient Ombudsman will ensure that our transition to a new organizational framework won’t affect patients or staff,” said Jette Campbell, the restructuring officer brought on by the company to oversee the bankruptcy reorganization process.

Humble Surgical Hospital filed for Chapter 11 bankruptcy protection Friday morning, three weeks after U.S. District Judge Lynn Hughes entered a multi-million judgment against the specialty, five-bed hospital, the Houston Chronicle reported on Saturday. Earlier this month, Aetna Life Insurance Co. was awarded $51.4 million, including nearly $10 million in interest, to recover excessive health care fees the insurer said it paid to the hospital during the past seven years. Humble Surgical estimated its assets between $10 million and $50 million and liabilities between $50 million and $100 million. Read more.

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

A group of South Dakota doctors has filed suit against four hospital administrators, claiming that they were defrauded out of millions of dollars in an investment that went belly up, the Argus Leader reported yesterday. The 12 doctors were investors in Progressive Acute Care, a company that in 2009 owned three rural hospitals in central Louisiana. The doctors were primarily orthopedic surgeons and neurosurgeons practicing at CNOS in Dakota Dunes. According to their complaint, the doctors owned about 40 percent of the preferred equity in Progressive Acute Care (PAC). Mike Hurlburt, a former CEO at CNOS and the chief operating officer for PAC, had introduced the doctors to the company. In 2012, Hurlburt and three others with PAC came up with a plan to buy a fourth hospital, also located in Louisiana. Hurlburt, the lawsuit says, “told the physicians that a return of three-to-four times their investment was assured, and that he was expecting a return of ten times their investment.” Based upon those assurances, the doctors invested an additional $3 million to purchase the fourth hospital and approved more than $10 million in additional debt for PAC to make the purchase. But the doctors claim in their lawsuit that the revenue numbers of the fourth hospital — called Dauterive Hospital — were falsified by the defendants. The lawsuit claims that in 2016, after PAC declared bankruptcy, a memo surfaced that showed PAC had deliberately falsified the profitability of the fourth hospital. The losses sustained by PAC after the purchase of the fourth hospital plunged the company into bankruptcy in 2016. Read more.

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

The 134-bed Louisiana Heart Hospital near Lacombe, La., will close within a month due to rising operating costs and reduced reimbursements, hospital officials announced, NOLA.com reported yesterday. The privately owned hospital also plans to file for bankruptcy. Care for current inpatients will not be interrupted, the hospital said. "Despite strong quality rankings and recent volume growth, Louisiana Heart Hospital has faced significant financial challenges in recent years. Like many hospitals around the nation, we struggle to balance shrinking reimbursements with rising operating costs," said Scott Boudreaux, chief executive officer of Louisiana Heart Hospital & Medical Group. "After many months of careful consideration and review of all available options, it has become clear we can no longer sustain the continued losses and have no choice but to cease operations." Read more.

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore.