CCS Oncology saw its revenue decline by 38 percent in 2017, the first year after Independent Health dropped the practice from its network.
That was a $10.6 million drop in gross revenue for CCS Oncology, once one of the area's largest private cancer practices, according to documents filed recently in U.S. Bankruptcy Court in Buffalo.
In fact, when counting CCS Medical, CCS' non-oncology segment, revenue at the combined practice fell 47 percent between 2016 and 2017.
Dr. W. Sam Yi, the president and CEO of CCS, has blamed the practice's difficulties on the move by Independent Health. Yi and CCS filed for Chapter 11 bankruptcy protection in early April but were forced to shut down clinical operations last week.
CCS Oncology and its related companies have assets of nearly $8.7 million and liabilities of $35.1 million, according to documents filed late last week that provide the fullest picture yet of the practice's struggles.
Court-appointed officials are working to close down the practice's operations and to protect the interests of patients as the bankruptcy case moves forward.
The Chapter 11 trustee will seek a buyer for the company's assets, the remaining CCS staff are collecting payments from patients and any proceeds will go to the creditors in order of priority, said Arthur G. Baumeister Jr., CCS' bankruptcy attorney.
"Dr. Yi cooperated in the transition of patients, and the wind down of the practices. He's of course, very disappointed," Baumeister said.
The most notable documents are financial disclosure forms required by the Bankruptcy Court that provide new detail on how CCS ended up there.
CCS Oncology brought in $27.6 million in gross revenue in 2016. That summer, however, Independent Health said it was ending its contract with CCS Oncology by the end of the year.
Yi had blasted Independent Health for dropping CCS Oncology from its network and had said the practice lost physicians and patients as a result.
But this is the first time the practice publicly quantified the effect, with gross revenue dropping to $17 million for 2017. Revenue appeared to stabilize in the first quarter of 2018, with CCS Oncology bringing in $4.2 million between Jan. 1 and the date of the filing. Adding in CCS Medical, combined gross revenue fell from $74.7 million to $39.8 million, and held steady at $9.9 million in the first quarter of this year.
Independent Health said 15 months of negotiations with CCS Oncology failed to produce an agreement on a new, value-based model of reimbursement.
"Independent Health did not make the decision to non-renew with CCS hastily," spokesman Frank Sava said in an email, noting that its decision was upheld on appeal.
It's clear why the practice filed for bankruptcy after viewing the updated court records.
CCS Oncology alone has just $3.5 million in assets– $2 million in medical equipment and inventory, $1.4 million it can collect from patients, $57,300 in bank and brokerage accounts and a 2016 BMW X6 crossover valued at $15,000. CCS Medical, CCS Equipment, CCS Billing and WSEJ Inc. add $5.2 million in assets, primarily real estate and accounts receivable.
Those assets are dwarfed by the $35.1 million owed by the companies to the creditors. That figure includes $16.5 million to Bank of America, $4.8 million to a supplier of medication and $4.2 million in unpaid federal employment taxes. CCS Oncology and CCS Medical have 465 nonpriority, unsecured creditors between them.
The statement also disclosed that CCS Oncology or Yi were named in 13 legal cases that were active in the year prior to the April bankruptcy filing. Most are lawsuits brought by vendors or former patients.
Also last week, the patient care ombudsman appointed by the United States trustee filed his first status report with the Bankruptcy Court.
Joseph J. Tomaino, the CEO of Grassi Healthcare Advisors in New York City, wrote in detail about the difficulties he, Chapter 11 trustee Mark Schlant and CCS staffers have had in closing down the practice while protecting patients and their records.
He said it was hard to pull together a complete list of patients to notify them of the closing and where they can receive follow-up care. He worries that some patients will slip through the cracks.
During on-site visits at practice locations earlier this month, Tomaino ran into a patient who was standing outside a locked door trying to get a prescription, and he found staff struggling to make copies of patient records.
He said Yi has contacted him several times to raise concerns about the arrangement with Roswell Park Comprehensive Cancer Center, which has offered to take on patients and to safely store records.
"If patients desire to be treated at an alternative practice they are free to do so," Tomaino said.
Finally, U.S. Bankruptcy Court Judge Michael D. Kaplan last week issued his fifth order granting CCS the ability to use cash collateral to pay some of its bills.
CCS has paid a minimum of $1 million since April 2 for chemotherapy medication, medical malpractice insurance premiums and employee payroll, among other expenses.
CCS must pay for chemotherapy drugs on a cash-on-delivery basis, according to Tomaino.