The Villages Health is up for sale this week after filing for Chapter 11 bankruptcy in July. However, the accepted bid has been met with several objections from insurance companies that have accused the health network of defrauding Medicare.
According to its website, TVH serves about 55,000 patients and operates eight primary care centers and two specialty care centers in and around The Villages, the popular north central Florida retirement community.
Court documents show CenterWell Senior Primary Care, a company owned by the insurer Humana, is expected to purchase TVH. CenterWell placed a stalking horse bid of $50 million, the minimum offer for an auction.
A judge is scheduled to consider the transaction Wednesday during a sale order hearing at a U.S. Bankruptcy Court in Orlando.
However, in August, United Healthcare expressed concerns with the court over a conflict of interest between The Villages Health and its debt financier.
The debt financier, the company that agreed to finance the system through bankruptcy, is PMA Lender LLC. According to Federal Reserve documents, PMA Lender is a subsidiary of Citizens First, the bank of The Villages.
In its August filing, United Healthcare attorneys said "the estate and creditors clearly have an interest in maximizing the proceeds of the sale of the company and the value of litigation claims against insiders and affiliates."
Ultimately, its concern is TVH is managing its own bankruptcy, rather than an independent trustee.
Theresa Radwan, who teaches bankruptcy law at Stetson University, said that isn't necessarily unusual.
"The challenge, of course, is that that also means that if there's a lot of insider deals going on, the person who is running the bankruptcy has a lot of control and is also benefiting from that," she said. "Essentially, United Healthcare is asking the court to say 'no' to that and not allow them to go forward with this particular debt financing."
United's mistrust comes after several years of being overbilled by TVH. Court documents show the health system received $350 million in overpayments by adding diagnostic codes to patient files through Medicare, resulting in overpayments by insurance companies.
UnitedHealth said it was burdened with the majority of those overpayments.
According to United Healthcare's court filings, TVH used a large portion of that money, $183 million, to pay down a line of credit with its majority shareholder – members of the Morse family, who own and operate The Villages.
Blue Cross and Blue Shield of Florida, owned by Florida Blue, also filed an objection, stating that it was also overbilled by TVH of $25 million over four years. Florida Blue said that in 2024 alone, those overpayments added up to $8 million.
While the sale order is scheduled for this week, Radwan said Chapter 11 cases can take at least a year to sort out, and that could disrupt a patient's quality of care.
"We hope not, but obviously, there's going to be some disruption," she said.
Bankruptcy cases can cause employees to seek other lines of work if trust in the company falters, Radwan said.
"There's almost always going to be some impact. But the hope is that, and this is where things like debt financing and such come in, if employees know they're going to get paid, they might not leave," she said.
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