Med Diversified Declares Bankruptcy

November 28, 2002
Med Diversified, a home health-care provider that serves more than 175,000 patients nationwide, has filed for bankruptcy protection. It is the sixth client of National Century Financial Enterprises to declare bankruptcy since National Century collapsed.

Med Diversified said the bankruptcy filing will insure that its patients will continue to receive services. Based in Andover, Mass., Med Diversified has about 7,700 employees. It operates in 37 states and the District of Columbia.

Med Diversified's New York division, Tender Loving Care Services, Inc., also filed for bankruptcy protection recently.

Other major clients of National Century currently in bankruptcy include home healthcare provider LifeCare Solutions Inc., Doctors Community Healthcare Corp., which operates hospitals, PhyAmerica Physician Group, Inc., a supplier of emergency-medicine doctors to hospitals, and Lincoln Hospital Medical Center in Los Angeles.

National Century's collapse has created critical cash flow problems for health care providers throughout the nation. The FBI raided the company's offices earlier this month, two days before the company filed for bankruptcy.

National Century provided financing based on its clients' receivables. Now that it is in bankruptcy, National Century's bondholders and creditors are withholding payments to health care providers and keeping for themselves payments from insurance companies for services the providers delivered earlier.