Long-term acute care hospital operator Landmark Holdings of Florida filed for Chapter 11 protections this week, citing high costs and “plateaued” reimbursement rates in the years following the onset of the pandemic.
The Naples, Florida-based company currently owns and operates five hospitals in Georgia and Missouri and manages a sixth in Florida, none of which it plans to immediately close. It employs about 625 workers (340 full-time) and brought in revenue of $79.4 million for the year ended Dec. 31, 2023.
Landmark listed assets and liabilities between $50 million and $100 million apiece, according to court filings. The outstanding debt obligation “is unsustainable in light of the current cash flow constraints facing the company,” according to a filing, and discussions with the administrator of its primary loan, Amerant Bank, for a potential modification have failed.
“Importantly, Landmark has sufficient cash on hand to fund ongoing operations of the hospitals to ensure that their patients have continued access to critical care,” according to the filing.
Landmark’s filing outlined a 29% rise in skilled nurse salaries, wages and benefits since 2020 as well as a 229% jump in contract labor. It also pointed to a rise in pharmaceutical cost per patient day from $41 in 2022 to $54 in 2024 and “stagnated” Medicare reimbursement.
Landmark said it tried to head off the financial troubles with layoffs and the close of a Florida office, an attempted shift in payer mix, lease renegotiation, redesigned employee benefits, outsourced billing and collection functions and several other initiatives.
“Despite … numerous and broad cost-saving and revenue improvement initiatives, Landmark has not returned to a level of profitability sufficient to service its substantial debt burden,” it wrote in the filing.
Landmark said it has engaged an investment banker to market its hospitals for bids as part of the bankruptcy process.
“Landmark is confident that this process will yield the best outcome for all of Landmark’s stakeholders, including its patients, vendors, physicians, staff, regulators, lessors, and its secured lender,” it wrote.
There were 57 Chapter 11 bankruptcy filings among healthcare companies with more than $10 million in liabilities across 2024, though just five within the hospital sector, according to restructuring advisory firm Gibbins Advisors. The largest of these involved Steward Health Care, a 31-hospital system that represents the sector’s largest bankruptcy in three decades.
Prospect Medical Holdings’ Chapter 11 filing in January has been the primary focus of 2025 and, like Steward, appears to have been driven by the system’s private equity investor. The past week saw two of its hospitals in Pennsylvania nearly close, though a weekend deal has provided short-term funding while the company continues searching for a new partner.