The Delaware Bankruptcy Court decided a significant case for nursing home Chapter 11’s on December 5, 2019. Monthly estimated Medicare payments are the life blood of nursing home cash flow. The estimates are based on the debtor’s census of its Medicare residents. This estimate is audited, usually once a year and the amount paid is ”trued up.” If Medicare believes it has been over-paying, it can withhold payments until it has conducted its audit, which of course can destroy the case for lack of cash flow. Here the Bankruptcy Court prohibited Medicare from stopping the monthly payments while they conducted their audit.
See In Re THG Holdings, Bankruptcy Court, District of Delaware, 19-02215.