GenesisCare’s Medicare snafu leaves lenders eyeing administrators

afr.com:

While the attention has been firmly on GenesisCare’s up-for-sale operations in the United States, some lenders are beginning to toy with the idea of a voluntary administration for the cancer services provider’s local operations.

GenesisCare is the largest operator of cancer care clinics in the country. Michele Mossop

It is understood the consideration of a voluntary administration is being driven by a Medicare overcharging bungle at the cancer care provider, as revealed by The Australian Financial Review in June. Sources said GenesisCare’s penalty could run into the hundreds of million of dollars, making an administration process a possibility for investors looking to protect their returns.

Street Talk does not suggest that GenesisCare’s Australian business is close to calling in the administrator or is close to collapse – it is easily the most profitable part of the company and was retained while the US business landed on the chopping block earlier this year.

But an Australian VA is definitely being seen as an option as the Medicare overcharging adds to the better-known troubles of the business.

The Brisbane-born cancer care provider was seen as a success story, expanding to more than 400 locations in Australia, US and Europe in 18 years. It came to be owned by KKR and China Resources alongside some doctors, and tapped formed CSL boss Brian McNamee to lead its US push.

However, things took a turn for the worse last year as the company struggled under nearly $US1.7 billion in debt, including money it borrowed to buy Florida-based 21st Century Oncology. McNamee left in 2022, while founder Dan Collins exited from his position as chief executive in March. Street Talk reported that Oaktree was taking an early look in January