THE VILLAGES, Fla. – U.S. officials are objecting to the language in the proposed sale for The Villages Health System, saying the health provider’s order could shield an “overly broad” list of parties from potential civil or criminal liability.
This comes as the federal government pursues a resolution over the $350 million in Medicare overpayments by the health care provider.
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The Villages Health System, a health care company that serves 55,000 patients in The Villages, filed for Chapter 11 bankruptcy in July, months after it announced that it had self-reported a Medicare overbilling issue to the tune of $350 million.
The bankruptcy was a step toward selling the company’s assets free and clear of its liability to the federal government.
On Thursday, the deadline for bidding in the sale ended. It is not known yet if there were any other bidders for the company other than CenterWell, owned by Humana, which set a stalking horse bid of $50 million.
On Friday, though, U.S. officials filed two objections to the proposed sale order. The objections said the order could be interpreted more expansively to stop the U.S. from pursuing claims against the final buyer for not just any liability in the TVHS overbilling case, but also any health care claims that are unrelated to the sale.
[READ: U.S. attorney’s objection]
The officials said they were particularly concerned that “insiders” in the sale of the company could be shielded from liability, especially since the final buyer remains unknown
In one objection, an attorney from the U.S. Justice Department specifically cites that from 2022 to 2024, TVHS paid $216.2 million for rent on its facilities, a line of credit paydown, and tax-related distributions to a majority shareholder.
“At this juncture, it would be improper for the Debtor to potentially provide releases to insiders without consideration or explanation as to the liability being released,” the attorney wrote.
The disclosure is similar to an objection made by United Healthcare in July, which said The Villages Health System’s bankruptcy plan allows the company to hide insider dealings.
United Healthcare accused TVHS of distributing some $183 million, from 2022 to 2024, to the Morse family, to pay down a line of credit.
The Morse family controls The Villages through several companies.
U.S. officials are asking that the language be clarified or narrowed.
The next hearing is set for Sept. 9.
[READ: U.S. Trustee’s objection]