Florida Medical Group with Dozens of Facilities and $500 Million in Debts Hits Bankruptcy

Photo byHumana Inc.

In a major shake-up in the Florida healthcare scene, MBMG Holding LLC, the parent company of Clinical Care Medical Centers, has filed for Chapter 11 bankruptcy. The Miami-based medical group operates over two dozen facilities across the state and is now facing a debt load of between $100 million and $500 million.

MBMG, owned by private equity giant Sun Capital Partners, filed for bankruptcy on October 13 in the U.S. Bankruptcy Court for the Southern District of Florida. The company’s largest creditors include big names like NextGen Healthcare, Lyft, and McKesson Medical Surgical. The financial woes seem to have been triggered by changes in Medicare and Medicaid policies, rising post-pandemic expenses, and the hefty debt the company took on after being acquired by Sun Capital back in December 2020.

Despite the financial turbulence, there's some good news. MBMG has lined up Humana’s subsidiary, Conviva Care Centers, to purchase Clinical Care Medical Centers for $45 million. The deal is expected to be finalized within the next couple of months, pending court and regulatory approvals. Paul McBride, CEO of Clinical Care Medical Centers, is optimistic about the sale, saying it will have a positive impact on patients, providers, and communities.

The bankruptcy filing also highlights the company’s plan to reject leases on some of its Florida locations, including sites in Palm Harbor and Tampa. Interestingly, MBMG abandoned its former Miami headquarters back in August.

Even with these challenges, McBride reassured that Clinical Care’s operations would continue as usual, and most of the staff, particularly those in patient-facing roles, will remain employed once the deal with Humana goes through.

As MBMG navigates bankruptcy, Sun Capital Partners, with $6.6 billion in assets, is working closely with global private equity firm KKR, which has provided $10 million in financing to help Clinical Care through the bankruptcy process. KKR had previously acquired Clinical Care’s senior debt from Capital One, adding another layer to the financial puzzle.

So, while MBMG Holding faces an uphill battle, there seems to be a plan in place to steady the ship, with Humana stepping in as a lifeline for Clinical Care Medical Centers. All eyes are on the bankruptcy court as the healthcare group works to restructure and move forward.