$25M default payment latest in troubles for 21st Century Oncology

FORT MYERS, Fla. Defaulting on a $25 million interest payment served as the latest in a string of financial troubles for 21st Century Oncology, which faced a year of multi-million dollar settlements, class-action lawsuits and a change in leadership.

“The Company has been working with its lenders, bondholders and stakeholders to address these events of default,” the Fort Myers-based cancer-care giant said in a recent SEC filing. “The Company has entered into forbearance agreements with certain noteholders and lenders to provide all parties with additional time to negotiate a transaction support agreement to remedy the events of default. However, there can be no assurance that the Company will reach such agreement in the timeframe provided, or at all.”

Company doctors billed Medicare and Tricare for expensive and unnecessary bladder cancer tests that could total over $30,000 in reimbursements per case. A 2013 whistleblower suit, filed by employment attorney Ben Yormak, alleged the tests were rarely effective.

The doctors received bonuses based on the number of referred tests, federal prosecutors said.

Four Southwest Florida doctors were involved in the practice, including one who ordered more than 13,000 tests since 2009, prosecutors said. Three of the doctors settled with prosecutors for more than $5 million.

The company is currently facing at least five class-action lawsuits and replaced their CEO in September.

21 Century, nor the doctors involved, admitted any liability for their involvement.