1 

Rachael L. Smiley 

Texas Bar No. 24066158 

FERGUSON BRASWELL FRASER KUBASTA PC 

2500 Dallas Parkway, Suite 600 

Plano, TX 75093 

Telephone: (972) 378-9111 

Facsimile: (972) 378-9115 

Email: rsmiley@fbfk.law 

-andNicole M. Lapenta (pro hac vice forthcoming) 

Eric S. Goldstein 

SHIPMAN & GOODWIN LLP 

One Constitution Plaza 

Hartford, CT 06103-1919 

Telephone: (860) 251-5059 

Facsimile: (860) 251-5218 

Email: nlapenta@goodwin.com 

 egoldstein@goodwin.com 

Counsel to Preferred Care Network, Inc., and 

Preferred Care Partners, Inc. 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

In re: 

CAREMAX, INC., et al., 

Debtors.1

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Chapter 11 

Case No. 24-80093 (MVL) 

(Jointly Administered) 

Re: Docket No. 21 

LIMITED OBJECTION TO DEBTORS’ MOTION 

FOR ENTRY OF AN ORDER (I)(A) APPROVING BIDDING PROCEDURES; 

1 A complete list of each of the Debtors in these Chapter 11 Cases may be obtained on the website of the Debtors’ 

proposed claims and noticing agent at https://cases.stretto.com/CareMax. The Debtors’ mailing address is 1000 NW 

57 Court, Suite 400, Miami, Florida 33126.

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(B) APPROVING THE SELECTION OF THE STALKING HORSE BIDDER; 

(C) APPROVING THE DEBTORS’ ENTRY INTO THE STALKING HORSE 

AGREEMENT; (D) SCHEDULING AN AUCTION AND COMBINED HEARING; 

(E) APPROVING THE FORM AND MANNER OF NOTICES RELATING TO THE 

CORE CENTERS SALE TRANSACTION; AND (F) APPROVING ASSUMPTION 

AND ASSIGNMENT PROCEDURES; AND (II) GRANTING RELATED RELIEF 

Preferred Care Network, Inc. (“PCN”) and Preferred Care Partners, Inc. (“PCP” and 

together with PCN, “Preferred Care”), hereby submit this Limited Objection (the “Objection”) to 

the Debtors’ Motion for Entry of an Order (I)(A) Approving Bidding Procedures; (B) Approving 

the Selection of the Stalking Horse Bidder; (C) Approving the Debtors’ Entry Into the Stalking 

Horse Agreement; (D) Scheduling an Auction and Combined Hearing; (E) Approving the Form 

and Manner of Notices Relating to the Core Centers Sale Transaction; and (F) Approving 

Assumption and Assignment Procedures; and (II) Granting Related Relief dated November 17, 

2024 [Docket No. 21] (the “Bid Procedures Motion”) filed by CareMax, Inc. and its affiliated 

debtors (the “Debtors”). 

Preferred Care hereby objects to the Bid Procedures Motion because the assumption and 

assignment procedures appear to violate state and federal law requiring advance notice to members 

if providers will be going out of network. This issue can be remedied if Preferred Care is given 

60 days’ notice prior to the Closing Date2

 of the Core Centers Sale Transaction if their contracts 

will be assumed and assigned. Preferred Care’s counsel has been in touch with Debtors’ counsel 

to discuss this issue and hopes to reach a resolution of this concern in advance of the hearing on 

the Bid Procedures Motion. 

In support of its Objection, Preferred Care states as follows: 

2

 Capitalized terms not defined herein shall have the meaning ascribed to them in the Bid Procedures Motion. 

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I. BACKGROUND 

A. The Preferred Care Risk Agreements 

1. Both Preferred Care entities have Certificates of Authority from the Florida Office 

of Insurance Regulation and have entered into a Medicare Advantage contract (the “Medicare 

Advantage Contract”) with the Centers for Medicare & Medicaid Services (“CMS”). Under the 

Medicare Advantage Contract, Preferred Care provides medical insurance to Medicare members 

enrolled in its Medicare Advantage plans (“MA Plans”). 

2. InterAmerican Medical Center Group, L.L.C. (“InterAmerican” or “Debtor”) is a 

provider network that engages physicians, physician groups, and ancillary providers to provide 

health care services to members of health maintenance organizations, preferred provider 

organizations, or other managed care companies with network contracts. 

3. Preferred Care entered into two risk-based contracts prepetition with InterAmerican 

for the provision of health care services to certain of Preferred Care’s members covered under MA 

Plans, as more particularly set forth below. 

4. PCN and InterAmerican are parties to that certain Medicare Advantage Network 

Risk Agreement with an effective date as of December 1, 2013 (as amended, the “PCN – 

InterAmerican Agreement”), pursuant to which InterAmerican arranged for or otherwise provided 

covered health care services to PCN’s members enrolled under MA Plans that are assigned to one 

of the Debtor’s providers.3 A copy of the PCN – InterAmerican Agreement is annexed hereto as 

Exhibit A. 

3

 The original parties to the PCN – InterAmerican Agreement were InterAmerican and Medica Healthcare Plans, Inc. 

(“Medica”). Between 2013 and 2019, the parties entered into four amendments to modify the capitation fee in 

Schedule B and modify the STARS Bonus Program (as defined therein). On January 1, 2022, Medica changed its 

name to PCN. InterAmerican and PCN entered into one subsequent amendment with an effective date as of January 

1, 2023 to replace the capitation fee payment appendix found in Schedule B. 

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5. PCP and InterAmerican are parties to that certain Medicare Advantage Network 

Risk Agreement with an effective date as of December 1, 2013 (as amended, the “PCP – 

InterAmerican Agreement” and together with the PCN – InterAmerican Agreement, the “Risk 

Agreements”), pursuant to which InterAmerican arranged for or otherwise provided covered health 

care services to PCP’s members enrolled under MA Plans that are assigned to one of the Debtor’s 

providers. A copy of the PCP – InterAmerican Agreement is annexed hereto as Exhibit B. 

6. Under each Risk Agreement, a fund is created on a ledger basis, referred to as the 

Medicare Operating Fund (the “Operating Fund”), into which Preferred Care deposits a fixed 

percentage of the monthly capitation payments it receives from CMS for members under MA Plans 

along with certain other funds as described in the Risk Agreements. These Operating Funds are 

the source of payment for all covered services rendered to members that are assigned to the 

Debtor’s providers under the Preferred Care MA Plans (and other plan-related expenses as 

described in the Risk Agreements). 

7. Generally speaking, if the costs of covered services of members in a particular 

month (referred to as a “Target Month”) is less than the amount deposited into the Operating Fund, 

the Debtor is entitled to such surplus. On the other hand, if the cost of covered services of members 

is more than the amount deposited into the Operating Fund in such Target Month, the Debtor is 

liable to Preferred Care for such deficits. Further, the Operating Fund has a companion “Security 

Reserve Account” that is intended to cover any deficits in the Operating Fund. The Security 

Reserve Account is funded by the Operating Fund to the extent revenues are available and in the 

absence of such revenue, by the Debtor, as applicable. 

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B. The Debtors’ Bankruptcy Cases 

8. On November 17, 2024 (the “Petition Date”), each of the Debtors filed a voluntary 

petition for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) 

in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the 

“Bankruptcy Court”). 

9. On that same day, the Debtors filed the Bid Procedures Motion. The Bid 

Procedures Motion provides a procedure for the assumption and assignment of Designated 

Contracts to the Successful Bidder (as defined therein). For example, the procedures provide for 

the Debtors to file a list of Assigned Contracts that may be Designated Contracts by December 18, 

2024. (Bid Procedures Motion ¶ 32(b).) However, prior to the Combined Hearing, the Debtors 

may add or remove Designated Contracts from the Notice of Designated Contracts. (Id. ¶ 32(e).) 

Moreover, the Debtors or the Core Centers Purchaser reserve the right to remove an “Executory 

Contract” from the Schedule of Assumed Executory Contracts and Unexpired Leases up to 30 days 

following the Closing Date of the Core Centers Sale Transaction. (Id. ¶ 32(g).) In addition, if 

there is a Cure Dispute that is resolved or determined “unfavorably” to the Debtors, the Debtors 

may withdraw the proposed assumption of the applicable Assigned Contracts after such 

determination. (Id. ¶ 33.) 

10. The Bid Procedures Motion also seeks to approve the Stalking Horse Bidder. On 

November 25, 2024, the Debtors filed their Notice of Designation of Stalking Horse Bidder. 

(Docket No. 132.) The Asset Purchase Agreement annexed thereto provides that the Successful 

Bidder will provide the seller 14 days prior to the confirmation hearing a schedule of contracts that 

it desires to have assumed and assigned. (Asset Purchase Agreement § 13.3(a).) Further, the 

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Successful Bidder can remove a selected contract from this list up to 30 days after plan 

confirmation. (Id. § 13.3(b).) 

11. In sum, under the proposed contract assumption and assignment procedures, as well 

as the Stalking Horse Asset Purchase Agreement, Preferred Care may only have one day’s notice 

of whether the Risk Agreements will be assumed and assigned. If the Risk Agreements are not 

assumed and assigned to the Successful Bidder, who will likely be employing the Debtors’ 

providers, then the Preferred Care member will need to be assigned to a new primary care provider 

that is in network. 

II. LIMITED OBJECTION 

12. Preferred Care hereby objects to the Bid Procedures Motion because the Motion’s 

proposed assumption and assignment procedures for the sale process do not allow for adequate 

time for Preferred Care to provide mandatory notice to members under state and federal law before 

a health care provider goes out of network, which is what will occur if the Risk Agreements are 

not assumed and assigned to the Successful Bidder. Indeed, these regulations are intended to 

prevent prejudice to members under MA Plans caused by abruptly switching the provider 

managing their ongoing care. 

13. CMS requires that Preferred Care, as a Medicare Advantage Organization, provide 

45 days’ notice before the termination effective date of a primary care provider in both writing and 

by telephone for all enrollees currently assigned to that primary care provider and to enrollees that 

have been a patient of that provider in the prior three years. 42 C.F.R. § 422.111(e)(1). This is 

applicable to MA Plans. See 42 C.F.R. § 422.2 (definition of “MA plan,” and “MA 

organization”). 

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14. In addition, Florida law mandates that contracts between providers (like the 

Debtors) and health maintenance organizations (like Preferred Care)4

 must require the provider to 

provide the health maintenance organization with at least 60 days’ prior written notice of the 

termination of the provider contract. Fla. Stat. Ann. § 641.315 (“The contracts must require the 

provider to give 60 days’ advance written notice to the health maintenance organization and the 

office before canceling the contract with the health maintenance organization for any reason”). 

15. Consistent with this requirement, the Risk Agreements require that the Debtor 

provide at least 120 days’ notice of termination without cause of such agreement. (See, e.g., PCN 

– InterAmerican Agreement § 9.4.) This allows for Preferred Care to carry out its notice 

obligations and avoid prejudice to its MA Plan members. 

16. These laws and regulations seek to avoid undue prejudice to individuals that are 

presently receiving care from the Debtor or planning to receive care from the Debtors because it 

is “in network” with Preferred Care. See 42 C.F.R. § 422.111(e). If the Debtor is suddenly out of 

network, Preferred Care’s members may suffer significant financial harm by being subject to a 

significantly higher cost-share (such as co-pays and deductibles) for medical treatment and 

procedures. It could also lead to negative health outcomes if Preferred Care’s members are forced 

to defer treatment on short notice while attempting to identify an alternate, “in network” provider. 

17. Here, the Debtors have not yet indicated whether either of Preferred Care’s Risk 

Agreements will be assumed and assigned to the Successful Bidder. While understanding that the 

Successful Bidder has discretion in choosing the Designated Contracts that are selected for 

4

 Under Florida law, a “health maintenance organization” means, inter alia, any organization which “[p]rovides 

through arrangements with other persons, emergency care, inpatient hospital services, physician care . . . ambulatory 

diagnostic treatment, and preventive health care services” or “[p]rovides, either directly or through arrangements with 

other persons, health care services to persons enrolled with such organization, on a pre-paid per capita or prepaid 

aggregate fixed-sum basis.” Fla. Stat. Ann. § 641.19(12). 

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assumption and assignment, Preferred Care simply requests that this process be done in a way that 

comports with state and federal regulations and avoids (or at least minimizes) prejudice to MA 

Plan members. This can be accomplished by providing Preferred Care with notice of the 

Successful Bidders’ decision on whether to include the Risk Agreements in the list of Designated 

Contracts at least 60 days prior to the Closing Date of the Core Centers Sale Transaction. This 

period will allow Preferred Care to attempt to comply with the requisite 45-day notice period 

required by 42 C.F.R. § 422.111(e)(1) and the 60-day notice period required by Florida Statutes § 

641.315, to the greatest extent possible, while balancing that need with the Successful Bidder’s 

discretion and the exigencies of the contemplated transaction. 

III. RESERVATION OF RIGHTS 

18. For all the reasons set forth herein, Preferred Care hereby reserves its rights to 

supplement this Objection or make such other and further objections as may be appropriate, 

including upon Debtors’ filing of a revised Bid Procedures Motion containing amended procedures 

for the assumption and assignment of Designated Contracts to the Successful Bidder. 

IV. CONCLUSION 

WHEREFORE, Preferred Care respectfully requests that the Court enter an order requiring 

the Debtors and Successful Bidder to give Preferred Care 60 days’ notice prior to the Closing Date 

of the Core Centers Sale Transaction, and granting such further relief as the Court deems 

appropriate. 

[Signatures on following page.] 

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Dated December 11, 2024. By: /s/ Rachael L. Smiley 

Rachael L. Smiley 

Texas Bar No. 24066158 

FERGUSON BRASWELL FRASER KUBASTA PC 

2500 Dallas Parkway, Suite 600 

Plano, TX 75093 

Telephone: (972) 378-9111 

Facsimile: (972) 378-9115 

Email: rsmiley@fbfk.law 

- and - 

Nicole M. Lapenta (pro hac vice forthcoming) 

Eric S. Goldstein 

SHIPMAN & GOODWIN LLP 

One Constitution Plaza 

Hartford, CT 06103-1919 

Telephone: (860) 251-5059 

Facsimile: (860) 251-5218 

Email: nlapenta@goodwin.com 

 egoldstein@goodwin.com 

Counsel to Preferred Care Network, Inc., and 

Preferred Care Partners, Inc. 

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CERTIFICATE OF SERVICE 

I hereby certify that on December 11, 2024, a copy of foregoing was served on all parties 

requesting notice via the Court’s CM/ECF filing system. In addition, a copy of the foregoing was 

served via electronic mail on the parties listed on the Complex Service List as of December 9, 

2024 [Docket No. 167], including proposed counsel for the Debtors. 

 /s/ Rachael L. Smiley 

 Rachael L. Smiley 

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