Steward Health Care System, which describes itself as the largest physician-led hospital operator in the US, filed for Chapter 11 bankruptcy on May 6 in US Bankruptcy Court for the Southern District of Texas. Several of its largest creditors are healthcare staffing firms.

Among Steward’s 30 largest creditors are staffing firms Aya Healthcare, Cross Country Healthcare (NASDAQ: CCRN), Prolink Healthcare and Advantage Healthcare Staffing, according to a court filing.

Aya has an unsecured claim of $42.2 million, according to court documents. Cross Country has an unsecured claim of $31.1 million. Prolink Healthcare follows with an unsecured claim of $30.8 million. Advantage Healthcare Staffing Services is reported to have an unsecured claim of $6.3 million.

Cross Country in a recent SEC filing noted an increase in bad debt expense during 2023, primarily driven by accounts aging from a single MSP customer. On May 9, the healthcare staffing firm reported that an MSP customer filed for Chapter 11 bankruptcy on May 6, the same day that Steward filed for bankruptcy. Cross Country didn’t mention the name of the customer. The customer owed Cross Country an estimated $20 million net of reserves and subcontractor receivables, according to the filing. Cross Country expects to take an associated bad debt charge in the second quarter of 2024.

In a note to SIA, Cross Country said it would not be commenting further beyond what was in the SEC filing.

Aya and Prolink have been contacted for comment. Contact information could not be found for Advantage; incorrect contact information was listed in the court document.

Steward said it filed for bankruptcy protection in order to continue providing necessary care to its patients without disruption.

“Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment,” CEO Dr. Ralph de la Torre said in a press release. “Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees and communities at this time.”

Steward noted insufficient reimbursement by government payors and “skyrocketing” labor costs are among the factors driving the Chapter 11 filing.

The company operates hospitals in Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania and Texas.

CNN reported the hospital system has put all 31 of its US hospitals up for sale and hopes to finalize the transaction by the end of summer to address its $9 billion in liabilities.

SIA sister publication Modern Healthcare reported on what Steward’s bankruptcy means for patient care.