William Borne went to sleep one night in 1998 running a fairly healthy operation. It had $55 million in sales from nursing, home care and a hodgepodge of other services. By the next day the company was on the verge of collapse. Borne had known for some time that Medicare was planning to overhaul the way it paid him and other home health care providers, switching from cost-plus to a flat rate determined in part by the diagnosis. But it wasn't until that day in April 1998 that he found out the details. The changeover wouldn't take place for two years. In the interim, however, the government slashed home care payments by more than half, in Home's case, and made the changes retroactive for six months. Amedisys, the Baton Rouge, La. company he founded in 1984, had to return $17 million in revenues, much of which it had already spent. It had $10 million in vendor bills it couldn't pay. "I wouldn't stop at red lights because I was afraid I'd get dragged out of my car," Borne jokes. He did lots of driving in those days—calling on suppliers to renegotiate those payments. His accountant recommended he simply file for Chapter 11. Borne nixed the idea because Amedisys didn't have the $1 million for legal fees.
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