Dive Brief:
- Envision Healthcare has emerged from Chapter 11 bankruptcy restructuring, with the physician staffing firm announcing late last week that it had reduced its debt by more than 70%.
- The financial restructuring splits Envision from its ambulatory surgery unit Amsurg, which will operate under new ownership separately from the staffing company.
- Envision also announced on Monday it appointed Henry Howe, the company’s chief financial officer, as interim CEO, effective Dec. 1, after CEO Jim Rechtin announced he was leaving to join insurer Humana early next year. Steve Nelson, president of senior primary care chain ChenMed, will head up the newly restructured firm’s board of directors.
Dive Insight:
The end of the restructuring period marks a “pivotal moment” for Envision as it exits bankruptcy with an improved balance sheet, the staffing firm said in a press release Monday.
Envision filed for bankruptcy in May, saying its large debt obligations, slowing patient volumes, battles with insurers and the “flawed” implementation of the No Surprises Act led to its downfall.
Envision said the No Surprises Act — a law that went into effect in 2022 and aims to protect patients from unexpected medical bills — hindered the company. Providers have said the rollout has been rocky, arguing the dispute resolution process is slow and rarely results in adequate reimbursement.
The firm also faced years of clashes with the insurance giant UnitedHealthcare. Envision lost its in-network status with the insurer in 2021, and the insurer and staffing firm targeted one another with lawsuits last year. Envision eventually receiving a $91 million award in an independent arbitration panel in the spring, finding United had breached its contract with the staffing firm reduced reimbursement in 2017 and 2018 in violation of its in-network agreement.
Private equity firm KKR purchased Envision in 2018 in a take-private deal valued at $9.9 billion. Envision’s bankruptcy filing marked one of the PE firm’s biggest losses, the Wall Street Journal reported in May.
