The Borrego Community Health Foundation filed for Chapter 11 bankruptcy after receiving a notification from the California Health and Human Services that payments for Borrego Health Medi-Cal services will be suspended Sept. 29.
Here are the issues the organization has faced over the past two years:
Oct. 20, 2020: State and federal agents raid the offices of Borrego Health, a Borrego Springs, Calif.-based federally qualified health center. Dozens of agents seize computers and medical records and interview employees at three Borrego Health locations. Agents also search the headquarters of Premier Healthcare Management, which provides billing and other management services to Borrego Health.
The raids come months after the Borrego Sun published a series of articles scrutinizing Borrego Health's medical services, management practices, governance structure and business practices. The reports found that more than 220 employees at the organization are paid more than $100,000 per year and that it paid its former CEO, Bruce Hebets, who died of cancer, a $1.9 million retirement gift.
Dec. 9: 2020: California temporarily suspends all state Medicaid payments to Borrego Health amid investigations into the health center conducted by the state Department of Justice's Division of Medi-Cal Fraud and Elder Abuse.
June 15, 2021: Borrego Health makes several changes to its leadership team in a sustainability push. A new leadership team is named, an undisclosed number of roles are eliminated and a significant number of administrative positions not directly related to patient care are realigned. Borrego Health also closes its assisted living facility and transfers operations of its childcare center to another organization.
Dec. 7, 2021: Borrego Health announces the closures of two of its clinics, the layoffs of 113 employees — 8 percent of the center's workforce — and the outsourcing of its in-house billing department. It says the closures are necessary after its landlord canceled the leases for the two facilities.
May 25, 2021: Borrego Health announces it is reducing the size of its administrative team, the closure of its consolidated call center, the creation of a centralized leadership team and the layoffs of 218 workers. Affected employees include nurses, phlebotomists, dental staff members and members of the management team.
Aug. 8, 2022: The Borrego Community Healthcare Foundation sues several past board members, executives and contractors over allegations of racketeering, fraud, nepotism, excessive compensation and self-dealing. The lawsuit filed in San Diego federal court accuses dozens of officials and contractors of stealing millions of dollars.
Aug. 19, 2022: The California Department of Health Care Services tells Borrego Health it is suspending all Medi-Cal payments for "continued and unresolved inappropriate billings." Regulators agreed to reinstate reimbursements for medical services in early 2021, but not for dental work, which remains the focus of a criminal investigation. The reinstatement comes after Borrego Health agreed to an independent monitor and other conditions. State health officials say they will withdraw all reimbursements by Sept. 29 because of Borrego Health's alleged failure to meet its settlement obligations.
Sept. 12, 2022: The Borrego Community Health Foundation files for Chapter 11 bankruptcy but says it will keep its clinics open. Borrego says the filing will prevent the Medi-Cal payment suspension from taking effect. Borrego also says it will work to resolve state and federal investigations during the bankruptcy.