The Dose

Welcome to The Dose, which tackles the business and economics inside the turbulent world of health care and life sciences in Indiana. Your host is John Russell. To contact me call 317-472-5383.

Sale of troubled home health firm unravels, leaving patients, employees in limbo

August 1, 2016

A tentative deal by one of Indiana’s largest home health providers to sell a big chunk of its operations to a competitor has unraveled, leaving the fate of more than 100 nurses and home health aides up in the air.

Nightingale Home Healthcare Inc., based in Carmel, confirmed Monday that its planned sale to Alliance Home Health Care of Indianapolis has fallen apart.

Nightingale had been under pressure to wind down operations in Indiana, after months of battling charges from the Indiana State Department of Health that it put patients in harm’s way.

It sought bankruptcy protection in December after the state’s determination prompted the federal Medicare programthe source of most of Nightingale’s $14.8 million in annual revenueto terminate its contract with the company.

Just a month ago, it looked as if Nightingale’s patients and employees could be smoothly transferred to Alliance, a 25-year-old company with about 125 full-time equivalent employees, including nurses and aides.

The companies had reached a deal to sell Nightingale’s Indiana operations in a transaction that was worth up to $3 million, depending on revenues. Nightingale announced at the time that it found it “necessary to cease operations generally, with the target of transitioning employees and patients … to another qualified provider to ensure continuity of employment for its staff and patient care for its patients.”

But Alliance said Monday it decided to pull out of the deal after doing due diligence and having too many questions about patient count and revenues.

Originally, Alliance expected to pick up about at least 1,200 patients, but that number had shrunk to less than 600 in recent weeks, said Kimberly Bremer, Alliance’s co-owner and director of private duty services.

“Financially, the numbers didn’t make as much sense for us as a business,” she said.

She added: “We’re just sad for the patients. This puts a lot of burden on them to figure out another alternative.”

An attorney for Nightingale disputed that account, saying the company had 800 patients, which “has not been significantly different” from earlier discussions.

“As I understand it, this was an internal issue within Alliancea disagreement between the owners as to whether this was something they could handle, or maybe they were biting off more than they could chew,” said J. Michael Grubbs, a partner at Barnes & Thornburg.

He forwarded a July 10 email from Janice K. Roberts, CEO of Alliance, to Dr. Dev A. Brar, Nightingale’s CEO, alluding to complications over funding.

“As you were aware, our financial partner was less than understanding of the timing and components involved in making this work,” Roberts wrote to Brar in the email. “We are sad we were not aware of this sooner to find an alternative funding source. Finding this out at such a late date tied our hands. … It is important that you know that the failure of this deal was out of my hands and I wish you the best of luck through this ordeal.”

Nightingale is now giving patients notice that the Indiana operations are closing. The company has already transferred “a few hundred patients” to a variety of other home health care companies.

“They should all be transferred shortly,” Grubbs said.

He said many of Nightingale’s workers would be following their patients to other providers, which he did not name. The company has about 70 full-time employees, 125 part-time employees and 19 contract employees. It was unclear whether all of them would find work with the other providers.

Even as Nightingale shuts down its Indiana operations, it will continue doing business in several other states. According to its website, it also has operations in Arizona, California, Florida, Illinois, Massachusetts, Minnesota, Nevada, Ohio, Pennsylvania and Texas.


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