Verity Health Care provider agreement sale appealed by California DHCS

By Caroline Salls

Pittsburgh, Oct. 10 – Verity Health Care System of California, Inc. creditor California Department of Health Care Services (DHCS) appealed a court order approving the company’s sale of Medi-Cal provider agreements, according to a notice filed Wednesday with the U.S. Bankruptcy Court for the Central District of California.

The court said in its Sept. 26 ruling that a dispute existed regarding whether the provider agreements entered between four hospitals and the DHCS are executory contracts or statutory entitlements.

If the provider agreements were deemed executory contracts, the DHCS may have been entitled to receive more than $50 million in payments in connection with the sale of the hospitals. However, since the court ruled that the agreements were statutory entitlements, they can be transferred to the buyer free and clear of claims and interests.

Verity is a Los Angeles-based nonprofit health care system. The company filed bankruptcy on Aug. 31, 2018 under Chapter 11 case number 18-20151.

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