LifeMasters Supported SelfCare Inc., an Irvine-based disease management company, has filed for bankruptcy.
LifeMasters, which helps people with chronic diseases manage their conditions, filed for Chapter 11 reorganization in the Santa Ana division of the U.S. Bankruptcy Court this week.
The privately held company said in a statement that filing for bankruptcy would be “the most efficient path to restructure liabilities” that came about after LifeMasters demonstrated disease-management techniques for the Centers for Medicare and Medicaid Services that were deemed unsuccessful by the Center, which is LifeMasters’ largest unsecured creditor.
The Centers for Medicare and Medicaid Services is owed an estimated $125 million by LifeMasters, according to the filing.
The federal government contends that LifeMasters was required to repay any fees earned in excess of savings generated during the multi-year projects, “and rather than endure a costly and time-consuming legal path to challenge CMS,” it chose to restructure through a bankruptcy filing, according to a LifeMaster’s statement.
In its filing, LifeMasters said it had assets of $10 million to $50 million, and liabilities of more than $100 million and as large as $500 million.
LifeMasters also said George Pillari, a managing director with Alvarez & Marsal Group, a Los Angeles-based turnaround consulting firm, is its new president. Pillari had been working with the board as a restructuring adviser. Pillari replaced cofounder Christobel Selecky, who remains a director and will serve as a senior consulting adviser.
LifeMasters sells its services to health plans, including Medicare and Medicaid, employers, pension systems and healthcare trusts run by labor unions.
