Vencor Files for Bankruptcy Protection

Vencor Inc., a nursing home and hospital operator that has been mired in debt and dogged by allegations of Medicare fraud during the last year, filed for Chapter 11 bankruptcy protection in Delaware. Vencor and several other large nursing-home providers have been facing financial problems since the federal government changed its Medicare payment system. Louisville, Ky.-based Vencor is the first large long-term-care provider to file for bankruptcy protection. Vencor also said it’s in negotiations with the Justice Department concerning the government’s outstanding Medicare claims against the company. Federal officials said they directed state regulators to step up monitoring of Vencor’s facilities because of the bankruptcy. Vencor officials did not return calls for comment. In June, Vencor’s stock was delisted from the NYSE and is now quoted on the over-the-counter bulletin board system. Vencor shares fell 16 cents, or more than 60%, to close at 10 cents.