New documents reveal how Delphi Behavioral Health Group went from boom to bust.
After two rounds of private equity backing, shrinking payer rates for out-of-network substance use disorder care squeezed the Fort Lauderdale, Florida-based addiction treatment provider out of business, reports Behavioral Health Business.
Documents show how shifting trends can undo fast-growing companies in high-demand sectors. In this case, Delphi Behavioral Health Group was on the wrong end of the shift away from luxury addiction treatment. It also put itself on shaky operating ground by going after out-of-network reimbursement rates.
Delphi Behavioral Health Group initiated Chapter 11 bankruptcy following the shutdown announcements. The proceedings reveal how far gone the company has been for years and how things unraveled for the once-growing company.
Today, Delphi Behavioral Health Group has shuttered all but three of 15 facilities. Those facilities will be up for sale, according to documents from the U.S. Bankruptcy Court of the Southern District of Florida.
The company once operated in California, Florida, Maryland, Massachusetts and New Jersey.
As of Feb. 6, Delphi Behavioral Health Group employed 423 employees. But by then, Delphi had closed 10 facilities. The corporate entity of Delphi is expected to shutter in June, the bankruptcy court documents state.
The bankruptcy proceedings and other court documents reveal a company struggling to maximize two rounds of PE investment. Read more.
