Court: Residents' 'immediate jeopardy' outweighs bankruptcy considerations, so provider license may be revoked after all

Florida's Agency for Health Care Administration can continue to try to revoke a nursing home's operating license, despite the facility declaring bankruptcy, a federal bankruptcy court has ruled.

The U.S. Bankruptcy Court for the Middle District of Florida was evaluating the “automatic stay” provision that protects entities during bankruptcy. In this case, it meant on behalf of the Rehabilitation Center of St. Petersburg, which is operated by Bayou Shores SNF LLC. But since the state believes the residents are in immediate jeopardy, “there can be no question the attempt to shut it down is an effort by AHCA to protect what it believes is in the best interests of the patients' safety and welfare,” the court wrote.

Its decision was the latest twist in a case that at one point had experts saying the center's bankruptcy plan would be a “nightmare decision” for the government. Without the ability to collect from Medicare and Medicaid, the latest decision makes it less likely the nursing home can successfully emerge from bankruptcy.