Med-Care EMS — which provides ambulance service to McAllen and Mission — filed for bankruptcy in November.
The Chapter 11 bankruptcy protects Med-Care from creditors while the company attempts to restructure debt.
“It’s a tool that’s used by many businesses when they find themselves with aggressive creditors and they have to turn to the courts for temporary relief,” said attorney Reynaldo “Rey” Ortiz, who represents Med-Care.
Med-Care filed for bankruptcy on Nov. 19 in the McAllen Division of the Southern District of Texas. The bankruptcy hasn’t been previously reported.
Chapter 11 bankruptcy allows Med-Care to operate under court supervision while the company attempts to restructure debt. Ortiz said the bankruptcy will not interrupt ambulance service.
“It’s not closing its doors,” Ortiz said. “Nobody should be worried.”
Med-Care contracts with McAllen, Mission, Hidalgo, San Juan, Alamo and Mercedes, according to court records filed by the company as part of the bankruptcy process.
Med-Care may also start serving La Joya during January.
The IRS is Med-Care’s largest creditor, with a $1.7 million claim, according to court records. Other major creditors include Greenwood, Indiana-based Med One, which is owed $575,000, and Santander Bank of Melville, New York, which is owed nearly $165,000.
Med-Care had just $80,000 cash-on-hand on Dec. 5, according to court records. It valued the company’s vehicles, including ambulances, at $565,000.
The company had nearly $28.5 million worth of accounts receivable, but anticipated that just $4.1 million would be collectable, according to court records. The majority of that money is old, uncollectable ambulance bills.
“You cannot deny transportation to a patient, especially in an emergency,” Ortiz said, adding that Med-Care provides emergency services first and handles billing later. “It’s the nature of the business.”
Problems with the IRS were a major reason for the bankruptcy filing, Ortiz said, adding that penalties and interest added up quickly.
Filing for Chapter 11 bankruptcy protected Med-Care while the company worked to restructure debt, Ortiz said, describing the move as a business decision.
“Heck, even Trump has used it five or six times in his lifetime,” Ortiz said, referring to the president. “If he can do it, Med-Care can do it.”
Mission Mayor Armando “Doc” O’caña said he met face-to-face with Ortiz and Med-Care owner Veronica “Ronnie” Ontiveros after the bankruptcy filing. They assured him ambulance service wouldn’t be interrupted.
“We’re monitoring it on a call-by-call basis,” O’caña said. “Because every call, we have a human life involved.”
Mission contracts with Hidalgo County EMS, another privately owned ambulance company, as a backup provider, O’caña said. If service is disrupted for any reason, Hidalgo County EMS will respond as appropriate.
The city of McAllen Ambulance Evaluation Committee also keeps tabs on Med-Care response times.
During a meeting on Tuesday, the committee reviewed statistics that showed no discernible change in service after the bankruptcy filing.
“And, of course, we’ll be looking at it closely just to make sure that it doesn’t affect anybody,” said McAllen City Commissioner Javier Villalobos. “But at this point everything is running smoothly.”