Borrego Health files for Chapter 11 bankruptcy, clinics will remain open
The Borrego Community Health Foundation (Borrego Health) has filed for Chapter 11 bankruptcy protection, officials announced Monday.
Borrego’s legal filing is driven by the August 19th notification from the State of California Health and Human Services Agency – Department of Health Care Services (DHCS) that the state intends to reimpose its 100% payment suspension on all Borrego Health Medi-Cal services beginning Sept. 29.
The Chapter 11 process will prevent the DHCS action from taking effect while also resolving ongoing state and federal investigations. The action supports Borrego’s mission to protect local healthcare access and meet the unique needs of the communities they serve.
A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy. Usually, the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money. A plan of reorganization is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements.
- US Courts - Cahpter 11 Bankruptcy Basics
During the Chapter 11 proceedings, Borrego Health will continue to operate in the ordinary course of business, officials confirmed.
"Patients will have the same access to their health care provider and services with no interruption of care. Borrego Health has also taken the necessary steps to ensure employees do not miss a paycheck and continue to receive a benefits package. Borrego Health will continue to pay salaries and fees, purchase supplies and equipment and ensure access to quality health care during this process."
Borrego Health provides healthcare services all throughout the Coachella Valley. The company has clinics in Cathedral City, Palm Springs, Desert Hot Springs, Indio, Thermal, and just last month opened its newest clinic in Coachella.
“Unfortunately, the misguided action by DHCS jeopardizes patients and has led us to make a difficult decision to protect our patients and their access to care,” stated Chief Executive Officer of Borrego Health, Rose MacIsaac. “Our mission to provide high-quality local access to those most in need drives us forward and this filing with the Court will allow us to continue to provide care as we do today while we secure the future of healthcare for our patients.”
Borrego Health has clinics all throughout Southern California, from San Bernardino County down to San Diego County. In 2021, Borrego Health served more than 120,500 patients and had more than 463,000 visits.
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