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SynCare files anticipated bankruptcy

IBJ Staff
February 22, 2012
Keywords
Health Care, Health Care & Insurance, Health Care & Life Sciences, Health Care Businesses
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As expected, SynCare LLC has filed for Chapter 7 bankruptcy protection.

The once fast-growing, Indianapolis-based disease-management company listed in court papers on Tuesday liabilities of nearly $5.7 million and assets of just $125,864.

The company’s decline pushed CEO Stephanie DeKemper into personal bankruptcy in late December, with the company itself expected to follow.

SynCare’s largest secured creditors include Fifth Third Bank, which provided two loans totaling $850,000 to the company. The bank filed liens against SynCare in March and May of 2011 in an attempt to recoup a portion of the loans from customer receivables and the value of business equipment, according to court documents.

Unsecured creditors include Bank of America, with a claim totaling $676,964, and Centene Corp. in St. Louis, which provided SynCare a loan totaling nearly $1.5 million.

SynCare effectively ceased operation in September after the Missouri Medicaid program revoked a major contract it had signed with SynCare and after Centene—which was both a client  and a lender to SynCare—stopped funding the company’s operations.

SynCare used nurses and social workers to call and visit Medicaid patients to evaluate their needs and teach them how to handle their health issues, in order to avoid expensive hospitalizations.

DeKemper started at SynCare in 2008 as a consultant and purchased the company in early 2010.

She quintupled the staff over the next year as SynCare took on a $5.5 million contract in Missouri to determine whether Medicaid patients were eligible for home-based care.
 

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  • From the insurance company's point of view
    Business MindedFebruary 24, 2012 11:07 AM
    Terry, it actually is a good and profitable business model given the medicare insurers are 3rd party insurance companies contracted by the state to manage the plan. They are in search of profits and anyway they can keep disbursements down, they can come out ahead. Here's how: If a health care consultant can help a patient manage care to prevent an incident that needs to be treated at the hospital then the insurance company wins since they pay the managed care provider a fraction of what the hospitalization would have cost. The managed care provider is hired by the state or the 3rd party insurance provider to reduce the number of hospitalizations, not by the insured.
    Reply to CommentFlag Comment
  • Poor Business Model
    TerryFebruary 23, 2012 6:07 AM
    This business may have sounded good to some, but the idea of managing a Medicare Patient at home by teaching the person "How to manage their health issues" should have been a red flag for the banks. Medicare pays by episode, not by prediction of need, or a Home Based Health Management Consultant. If the patient needs a visiting nurse for a specific reason, there is a Charge Code. I think the banks made a big mistake on this one. If I am missing something on this one, please post how this business model benefits the patient and Medicare.
    Reply to CommentFlag Comment

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