Maui Radiology Consultants filed for Chapter 11 protection yesterday in U.S. Bankruptcy Court, blaming declining insurance reimbursements for a drop in revenue. Maui Radiology
files bankruptcyBy Lyn Danninger
ldanninger@starbulletin.comThe Kahului-based physician group, with five clinics on Maui, had provided x-ray services and employees for Maui Memorial Medical Center until its contract was canceled in June 2001. It has about 30 employees and does not anticipate any layoffs, according to Alice Deppe, the group's administrator.
The company listed 16 pages of unsecured debts and indicated it owed creditors somewhere between $1 million and $10 million, and has assets in the same range. No figures are yet available for how much the group owes its largest secured creditor, the Bank of Hawaii.
Jerry Gubin, attorney for Maui Radiology Consultants, said the next move will be to take a step-by-step look at the group's equipment leases to determine what it needs to retain in order to continue business.
Gubin said he believes the primary reason for the group's financial slide has been a decline in reimbursements from insurance companies.
"It's just a question of cash crunch. I think it's the decline in reimbursements that everyone is facing," he said.
Still, Gubin said there is no reason that the group can't re-organize and continue business.
"All the same MDs and radiologists are staying on so there shouldn't be any reason why they shouldn't be able to reorganize," he said.
In January this year, the group became the first in Hawaii to acquire the most modern MRI scanner, the GE Signa Infinity 1.5T, which can scan patients four times faster and gather four times as much information as conventional MRIs.