Fred Chapman arrived home Feb. 27 after visiting his son, Zachary Chapman, a long-term acute care patient, at LifeCare Hospital of Fort Worth.
Zachary, 34, has paraplegia and severe brain and spine injuries. He has been a patient at LifeCare since early February.
Chapman went on with this day without any worries. In his mind, tomorrow would be another normal day.
On the morning of Feb. 28, Chapman received a call from his son鈥檚 mother, who informed him would be closing down the Fort Worth hospital because of operational issues. In a matter of days, Chapman would have to find a new long-term care facility for Zachary.
鈥淚鈥檓 having a hard time. I鈥檓 trying to take care of my son,鈥� said Chapman. 鈥淎ll I can do is just try to keep my head above water and deal with it.鈥�
LifeCare the Report the costs of health care labor, supplies, equipment and pharmaceuticals have outpaced Medicare reimbursements, and patient admission roadblocks from Medicare and the have affected the care provider鈥檚 ability to sustain patients at the hospital.
Behind the scenes, LifeCare owes more than $800,000 in legal judgments and delinquent taxes, according to a review of public documents by the Report.
鈥淭he hospital鈥檚 financial hardship came as a direct result of sudden changes in federal reimbursement plus increasingly restrictive policies by managed care companies,鈥� Kathleen Wallace, CEO of LifeCare, said in a statement. 鈥淭hese restrictive payment policies drastically affected the hospital鈥檚 revenue, leading to an unsustainable operational environment.鈥�
Unpaid invoices, delinquent taxes pile up
LifeCare focuses on treating and serving patients who may require long-term acute care. It has a hospital in Plano and, prior to the closing, Fort Worth. LifeCare鈥檚 Dallas facility also recently closed. The care provider treats a variety of health conditions, including complex pulmonary diseases, respiratory failure, brain and spinal cord injuries, and joint replacement complications.
A long-term acute care facility is a specialty care hospital designed for patients with serious medical problems that usually require treatment for 20 to 30 days. The Fort Worth hospital , including 10 ICU beds and 35 telemetry-capable beds.
At the heart of LifeCare鈥檚 debts are unpaid invoices from several medical staffing agencies. Since December, at least three agencies have won default judgments in lawsuits against the company. The care provider failed to respond to each lawsuit, prompting the defaults.
The largest judgment, which totals $476,006 before interest, was awarded to HRK Medical Staffing Inc. in December. HRK alleged that LifeCare failed to pay for contracted staffing services from 2020 to 2023, then signed a settlement agreement, only to break the terms of the agreement in October 2023.
In February, Advantage Healthcare Staffing was awarded a $160,777 judgment against LifeCare, and Rhino Medical Services was awarded a $38,434 judgment.
LifeCare also owes $141,579.69 in delinquent taxes on its Fort Worth property, according to reviewed by the Fort Worth Report. LifeCare Health did not issue a statement specifically addressing the legal settlements and taxes.
James Langabeer, professor of health systems analytics with the McWilliams School of Biomedical Informatics at UTHealth Houston, said facilities like LifeCare are at a disadvantage because of their limited patient population.
Since these facilities don鈥檛 serve patients with a variety of health conditions, they are often in financial distress. To survive growing costs, smaller-scale facilities and hospitals resort to selling to larger health systems or falling back on cash reserves and reimbursement rates, he said.
鈥淲e鈥檙e seeing a lot of these types of facilities going away completely,鈥� he said.
In the U.S., the increase in hospital expenses between 2019 and 2022 more than doubled over the increases in Medicare reimbursement for inpatient care during that time frame. Over half of the country鈥檚 hospitals ended 2022 operating at a financial loss, according to the .
Long-term care hospitals operate with high costs because of the nature of the care they provide, Wallace said in a statement.
鈥淭hese institutions cater to patients with complex health needs, and the cost of providing such care is significant,鈥� she said. 鈥淲hen reimbursement rates are reduced or altered unexpectedly, it has a profound impact on the hospital鈥檚 ability to cover operational costs.鈥�
Langabeer said LifeCare Health鈥檚 financial status showed signs of struggle.
鈥�(LifeCare) is a very small system that doesn鈥檛 have a teaching hospital affiliation and a lack of good relationships with big hospitals,鈥� he said. 鈥淪uccess is based on partnerships, collaborations and having a good name brand in the industry. Looking at my financial database, LifeCare didn鈥檛 have cash reserves in the (Fort Worth) facility.鈥�
Former employee, patient allege lack of communication
Deena James, 58, knew she鈥檇 be out of a job in a few days, but she couldn鈥檛 take the time off. As a at the Fort Worth hospital, she knew she had patients relying on her while they awaited relocation to other long-term acute facilities in North Texas. Those last days were somber, she said.
鈥淭here was a patient here that was on dialysis, and I remember on the last day she started crying,鈥� James said. 鈥淪he鈥檚 on dialysis, dude, and now she has no insurance to pay to keep her alive. Who does that to people?鈥�
James had been notified of Life Care Hospital of Fort Worth鈥檚 closure the afternoon of Feb. 27. During those final days, James said she was not able to get in direct contact with leadership at LifeCare. The company wasn鈥檛 transparent or effectively communicating with staff and patients, she said.
鈥淧eople started coming in and moving equipment out while we still had patients in the building,鈥� she said. 鈥淭hey鈥檙e coming in and pulling out machines, machines, machines. They started stripping that hospital.鈥�
Even before LifeCare closed the Fort Worth hospital, James had heard whispers about the company鈥檚 financial problems.
Since being laid off, James has been searching for a job. She鈥檚 currently relying on her last check from LifeCare to keep afloat.
鈥淎t this point, I鈥檓 just pissed off,鈥� she said. 鈥淭here鈥檚 so many of us looking for jobs. 鈥e鈥檙e desperate for jobs. I鈥檓 58 and unemployed, and I鈥檓 searching every day. I鈥檓 afraid I鈥檓 not going to get another job. And so, what do I do, live in my car? I don鈥檛 understand why they did this to us.鈥�
Wallace said notices were sent to employees and all concerned as management at LifeCare made the tough decisions to close the facility.
鈥�(LifeCare) is paying all owed wages and accrued paid time off according to the Texas Payday Law,鈥� Wallace said in a statement. 鈥淎ll impacted employees are being evaluated for opportunities within the company and have been provided a listing of other health care entities in the area who have notified us that they have interest in hiring impacted employees.鈥�
In Texas, the Worker Adjustment and Retraining Notification Act, under most circumstances, requires businesses to provide notice 60 days in advance of plant closures or mass layoffs,
LifeCare previously did not respond to the Report鈥檚 question asking if the care provider notified the Texas Workforce Commission about the company鈥檚 plans to close the Fort Worth hospital. The is intended to offer protection to workers and their families by helping workers understand their rights and responsibilities.
Chapman has been overwhelmed trying to find another facility in Fort Worth that can take in his son and properly manage his medical needs. LifeCare did not properly inform him and his family about the closure nor give him the proper amount of time to relocate, he said.
鈥�(Zachary) has exhausted his Medicare days. I don鈥檛 have any place to bring him,鈥� he said. 鈥淭his is all out of my wheelhouse. When your loved one gets hurt, no one comes to you and teaches you everything you need to know. 鈥� I鈥檓 about to pull my hair out.鈥�
LifeCare said it will focus its resources on continuing to serve patients at its Plano campus.
鈥淲e understand that this has been a difficult transition for all parties involved, particularly our patients and their families,鈥� Wallace said in a statement. 鈥淥ur primary goal during this period is to ensure that all patients continue to receive the standard of care they need and deserve.鈥�
Since last speaking with the Report, Chapman鈥檚 son, Zachary, has been transferred to LifeCare Hospital of Plano, but the experience has been stressful and expensive.
鈥淚 don鈥檛 plan on leaving (Zachary) anywhere. I鈥檓 staying up there with him until he can come back home,鈥� Chapman said in a text.
David Moreno is the health reporter for the Fort Worth Report. His position is supported by a grant from Texas Health Resources. Contact him at david.moreno@fortworthreport.org or on X.
Emily Wolf is a government accountability reporter for the Fort Worth Report. Contact her at emily.wolf@fortworthreport.org or
At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy .
This first appeared on and is republished here under a Creative Commons license.