CareMax Layoffs Could Reportedly Impact 530 Employees

CareMax could lay off 530 employees – including executives – next year, according to reports.

Ultimately, the layoffs are dependent on the completion of the sale of CareMax’s management services organization and its clinical centers business. The news comes just a month after the Miami-based primary care provider filed Chapter 11 bankruptcy protections.

As a company, CareMax provides primary care, specialty care and coordinated services to older adults. It also has a proprietary software and services platform.

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Currently, CareMax is awaiting court approval on two transactions, the sale of its management services organization to private equity-backed Revere Medical and its clinical centers to ClareMedica Health Partners.

“The purchaser, in its sole discretion, shall decide which, if any, Company employees it plans to hire upon the close of the transaction,” CareMax wrote in a Dec 2. WARN Act Notice.

In 2022, CareMax acquired the Medicare value-based care business of Steward Health Care System. The business included a Medicare Direct-Contracting Entity (DCE) and two Medicare Shared Savings Program (MSSP) and accountable care organizations (ACOs).

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Plus, Steward’s network included 380,000 Medicare Advantage (MA) fee-for-service beneficiaries and 480,000 traditional Medicare beneficiaries.

Steward filed for bankruptcy in May. When CareMax filed for Chapter 11 bankruptcy protections last month, the company cited its connections to Steward as one of the reasons behind its challenges.

“The company’s complex business relationship with Steward further negatively impacted the company’s operations and financial state,” according to court filings. “Steward’s financial distress and Steward’s own chapter 11 cases have impacted the company.”

CareMax also cited larger industry headwinds as another contributing factor, according to the court documents.

“Simultaneously with the company’s specific challenges, industry-wide headwinds continued to drive profitability down. Unforeseen negative changes in regulatory reimbursement rates, such as through the Center for Medicare and Medicaid Services’ (“CMS”) new “V28”reimbursement model, cut into revenues while widespread inflation has driven rising labor and other operational costs, and unprecedented high levels of medical utilization following the COVID-19 pandemic have strained resources. The Core Centers Business was further impacted by changes to health plan benefit designs which favored payors.”

Both the Revere Medical and ClareMedica Health Partners transactions are slated to close by Jan. 31. Employees who are offered a position with the management services organization will receive notice by on or before Jan. 17.

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