Univita closed after failing to find financing

Aug. 06--Univita of Florida, a health company in Miramar, closed abruptly and laid of hundreds of workers because it didn't have enough cash to keep operating, according to a letter the company sent employees.

Univita couldn't find "additional funding necessary to stabilize cash flows," Chief Financial Officer Jack Greenman wrote to employees July 27.

The letter informed 591 workers at the headquarters and satellite office that they were laid off immediately.

Greenman could not be reached for further comment Thursday.

Ultimately, 1,002 Univita employees or those at subsidiaries were told their jobs would be eliminated. A few dozen have been kept on until Aug. 12 to help shut down operations.

Two New York attorneys have filed a class action lawsuit on behalf of the laid-off workers. Their jobs ended "without advance written notice and [they] abruptly lost their health care coverage," said attorney René S. Roupinian. She and attorney Jack Raisner are seeking 60 days of wages and benefits for each of the laid-off employees that federal law requires in event of a company's sudden shutdown.

"It's hitting a lot of people hard," Raisner said.

Univita executives had not told workers of the company's financial problems -- until they were being laid off, he said. "They were told they had good jobs," Raisner said. As a result, employees weren't prepared to suddenly look for other work or to keep expenses down, he said.

Meanwhile, the Florida Agency Health Care Administration has been working with HMO providers to ensure that Medicaid recipients will keep on receiving home-based services or equipment even as Univita closes.

"I would like to reiterate that we will continue to focus on ensuring Floridians have access to quality health care -- this includes working to prevent any lapses in service," agency spokeswoman Shelisha Coleman said in an email Thursday.

Univita had contracts with HMOs to serve a million Medicaid recipients in Florida. About 50,000 had actually received services through Univita, Coleman said.

She said she did not know how much money Univita had received through Medicaid. She referred that question to the health insurance companies that had contracts with Univita.

Univita didn't disclose to its employees why it had a cash flow problem except to say that last year the company had experienced a drop in "customer profitability" largely due to "changes in utilization rates and patient mix."

The company could not find new lenders, investors or buyers of its subsidiaries to bring in more money for the company to keep running, Greenman said in a two-page letter to Univita workers.

"Despite significant fundraising efforts, the company was ultimately not able to raise sufficient capital to address its liquidity concerns and the company engaged insolvency counsel," Greenman wrote.

He said Univita leaders knew July 24 that their efforts had failed to raise money and they held meetings three days later to announce to employees that they would be let go.

Meanwhile, venders have been scrambling to get what they said was owed them. They include Cynthia Estevez, who was trying to get into Univita headquarters on Wednesday. She was told that workers there couldn't help her.

She said Univita owed her company, Estevez Towing of Miami, about $3,000 for towing services.

Univita's vehicles "broke down a lot," she said.

Researcher Barbara Hijek contributed to this report.

[email protected] or Twitter @donnagehrke

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