Recent reports indicate that Chapter 11 bankruptcy filings by clinics and physician practices are increasing at an alarming rate this year. According to a recent report from Gibbins Advisors, clinic and physician practice bankruptcies accounted for nearly 30% of healthcare Chapter 11 filings involving at least $10 million in liabilities during the first half of 2026. This trend can be attributed to familiar challenges facing this sector: reimbursement pressures, rising labor costs, regulatory complexity, inflationary expenses, and evolving federal healthcare policies.
For physician practices and healthcare organizations, these developments are more than headlines. They are a reminder that financial and operational risks should be identified and addressed before they become crises. Smaller providers are often the first to feel the impact of industry-wide pressures, but the challenges are increasingly affecting organizations of every size. Smaller firms also often have less built-in capacity to weather these cash-flow challenges over time.
At Bernstein Shur, by combining healthcare and restructuring expertise, we work with providers, physician groups, clinics, and other healthcare businesses to navigate these uncertain conditions. Whether advising on regulatory compliance, physician practice transactions, corporate restructurings, governance issues, employment matters, or strategic affiliations, our goal is to help clients develop solutions that strengthen their organizations and position them for long-term success. As the healthcare industry continues to evolve, providers need trusted advisors who understand the legal, regulatory, and business realities they face. By addressing challenges early and strategically, healthcare organizations can better withstand these increasing market pressures and remain focused on serving their patients and communities.
Adam R. Prescott is a shareholder and strategic business advisor who counsels organizations of all sizes—from closely held Maine businesses to regional health care providers—on complex transactions, financial restructuring, Chapter 11 and Subchapter V reorganizations, and commercial litigation. He can be reached at [email protected].
Tracy J. Roberts is a Senior Counsel and dual-certified health care compliance and privacy attorney who draws on her background as a former health system executive to advise highly regulated organizations on compliance program development, HIPAA and privacy matters, regulatory risk, and health care transactions. She can be reached at [email protected].