The health system that operates eight primary care centers and two specialty care centers for residents of The Villages retirement community in Florida has filed for bankruptcy, with creditors including the federal government, to which court records show it owes approximately $361 million due to erroneous Medicare billing. 

The Villages Health, or TVH, filed for Chapter 11 bankruptcy on Thursday in the Bankruptcy Court for the Middle District of Florida.

In a letter to patients on Thursday, the system’s CEO, Bob Trinh, “admitted that The Villages Health has been on the receiving end of ‘hundreds of millions of dollars in overpayments’ through Medicare,” the Villages-News reported.

“In the Fall of 2024, TVH identified and immediately investigated a potential set of problems with its Medicare billing practices, and based on the results of that investigation, took immediate action on several fronts to report and correct the situation, while also proactively self-reporting the identified billing discrepancies to relevant US government agencies,” the company said in a press release. “TVH has spent the past six months working diligently with the Medicare program.”

The system has more than 200 other major creditors, according to court records. The bankruptcy filing shows that the company owes between $100 million and $500 million but has assets worth $50 million to $100 million.

As part of restructuring plans, the company has entered into a “stalking horse” purchase agreement with CenterWell Senior Primary Care, the healthcare services business of Humana, which intends to purchase all of the company’s care centers.

“CenterWell is excited to enter into this agreement with The Villages Health, and we look forward to helping TVH patients achieve their best health through our personalized and integrated approach to care,” said CenterWell President Sanjay Shetty, MD.

Trinh said there would be no impact on patient care during the transition.

“We believe this plan of reorganization and planned transaction with CenterWell is in the best interests of our patients, physicians, other clinicians, employees, partners and community members and will ultimately result in a more promising future,” said Elliot Sussman, MD, chairman of the board and physician founder of The Villages Health.

Whether the transaction moves forward and closes, according to TVH, will depend on a court order approving the sale and an auction process during which other parties may submit offers to purchase the Villages Health System’s assets.

The system’s work toward a resolution with the federal government, “estimated at hundreds of millions of dollars in overpayments and likely significant accompanying penalties,” continues and is “independent of, and being conducted separately from, the transaction with CenterWell,” according to TVH.

The Villages, with a population of about 80,000 people as of the 2020 census, caters to individuals who are aged 55 or more years and features traditional homes and apartments, as well as independent living, assisted living and memory care communities.