ATLANTA (AP) - The nation's second-largest nursing home operator filed for Chapter 11 bankruptcy protection today, blaming federal cuts in Medicare reimbursement.
Atlanta-based Mariner Post-Acute Network, which runs more than 400 nursing homes nationwide, said it had secured $150 million in debt financing from Chase Manhattan Bank and PNC Bank.
The company said the 1997 Balanced Budget Act had cut its Medicare reimbursement. It filed for protection in U.S. Bankruptcy Court in Wilmington, Del.
``The crisis in long-term care continues to grow as dramatic Medicare cuts, explosive litigation costs and staffing shortages threaten the viability of long-term care providers,'' Mariner chairman Francis Cash said in a statement.
Two other large long-term care chains - Louisville, Ky.-based Vencor and Albuquerque-based Sun Healthcare Group - have filed for bankruptcy protection in the past six months.
Vencor, which operates 293 nursing homes and 56 hospitals in 46 states, had difficulty paying rent at its facilities. Vencor also agreed last year to repay Medicare for $90 million in overpayments.
Sun provides care to about 40,000 people in 369 nursing homes nationwide.
Experts blame soaring liability insurance costs and say there's not enough federal and state assistance for caring for the elderly, many of whom are poor.
Earnings for Mariner Post-Acute Network were off more than $1.5 billion in the fiscal year that ended Sept. 30, The Dallas Morning News reported today, citing an unidentified source.
Last May, the company laid off 7,300 of its 65,000 workers, also blaming cuts in Medicare reimbursement.
Mariner operates more than 400 homes across the nation with about 50,000 licensed beds.
Once granted bankruptcy protection, a company can continue normal operations under supervision of the bankruptcy court as it reorganizes. Then, before the company can emerge from protection, its creditors must sign off on any reorganization plan.
The value of Mariner stock plummeted last year, and trading was suspended on the New York Stock Exchange in October because of the company's deteriorating financial condition.