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By Hugh Cameron
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Another health care firm has filed for Chapter 11 bankruptcy to restructure its debts, following a wave of financially distressed providers seeking court protection earlier this year.
On Thursday, Omni Health Services, Inc. filed for bankruptcy protection with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.
The Colmar-based company operates several clinics across the Mid-Atlantic, and provides outpatient therapy, intensive behavioral programs and various other mental health services. In court filings, Omni Health Services listed both assets and liabilities in the range of $1 million to $10 million, as well as between 100 and 199 creditors.
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A spokesperson for Omni Health Services told Newsweek that the pandemic exacerbated long-running financial pressures, and that the company closed underperforming locations which led to layoffs, lawsuits and the eventual need to file for Chapter 11 protections.
Why It Matters
Although bankruptcy filings in the health care sector have slowed in 2025 compared to recent years, several large firms continue to seek court protection and experts say economic headwinds and recent policy shifts may mean turbulence ahead for America's providers.
What To Know
A mid-year report from the consulting firm Gibbins Advisors found that there were 79 health care bankruptcy filings in 2023 and 57 in 2024, both well above the annual average of 42 from 2019–2022. The firm’s latest report identified 12 new filings in the third quarter of the year, in line with the six-year quarterly average and keeping 2025’s total around 16 percent below last year's levels.
While the number of new filings has slowed, many high-profile, financially distressed health care providers are among those that have sought protection in 2025.
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In August, S&P Global Market Intelligence identified three health care companies with assets of more than $1 billion that had filed for Chapter 11 protection in the first seven months of 2025.
- L.A.-based Prospect Medical Holdings filed for bankruptcy in January and has since been attempting to off-load the majority of its hospitals.
- LifeScan Global, which provides glucose-monitoring and diagnostic equipment, sought Chapter 11 protection in July and hopes to reduce more than three-quarters of its debt thanks to ongoing restructuring efforts.
- Genesis HealthCare, a leading provider of post-acute and long-term care services, also filed in July to address what it described as "legacy liabilities associated with previously divested operations."
David Himmelstein, professor of public health and health policy at the CUNY School of Public Health, told Newsweek that the involvement of private equity-owned or -backed firms—and their strategy of “loading acquisitions with debt while stripping them of assets”—could be pointed to as a potential contributing factor. LifeScan Global said it did not view this as a “driver” of the Chapter 11 filing, instead citing the declining success of its blood glucose monitoring business, prior restructuring efforts that failed and a desire to eliminate its $1.4 billion debt burden.
What People Are Saying
An Omni Health Services spokesperson told Newsweek via email: "We had five-six clinics in remote areas of Pennsylvania which were losing money, we were losing 25-30k a week. We tried our best to keep it open, but the losses were huge and draining money from our strong good clinics, so we decided to close nine clinics in the past few months. So we had to break leases and had to lay off staff, this was also cause to file Chapter 11 as landlords had started suing us."
"We have 9 clinics now [and] we want to stabilize them, restructure our debts and be financially strong, we will continue to provide quality care services and survive," he added. "Hope to emerge out more stronger soon."
Professor Lawton Robert Burns, author of The U.S. Healthcare Ecosystem, told Newsweek in August: “There's a lot of wreckage out there along the highway of health care.”
“There haven't been any positive developments or reasons why we should think the healthcare sector is going to be on stronger footing in 2025 and 2026,” he added.
What Happens Next
According to Gibbins Advisors, “past patterns suggest Q4 may bring a modest increase” in health care bankruptcies. It added that recent policy shifts, such as the spending reductions included in the One Big Beautiful Bill Act, could mean a “tougher road ahead for providers.”
Update 11/22/25, 7:32 a.m. ET: This article was updated with a response from Omni Health Services.
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