Grace Place adult center to close doors after 51 years A Grace Place adult care provider files for Chapter 11 bankruptcy, says it will shut down operations in April

A Grace Place Adult Care Center Inc., a local nonprofit that provides adult day care services to about 170 people with physical, developmental and age-related disabilities, has filed for Chapter 11 bankruptcy protection and plans to close after 51 years in operation.

"Regrettably, with changes at both the state and federal level to programs that support seniors and those with disabilities, A Grace Place is no longer viable," the Henrico County-based company said in a filing Friday in U.S. Bankruptcy Court in Richmond.

Its last day of operation will be in April, the center said in the filing.

Lynne Seward, A Grace Place's interim CEO, said in an interview Friday that the exact closing date is uncertain, as the center is focusing for the next few weeks on getting its clients placed with other adult care centers or programs.

"There are a lot of good day centers out there, and there are a lot of programs, but the problem is a lot of our adults have significant medical complexities" that may make it difficult for other centers to accept them, Seward said.

"This is going to be a hard transition" for the clients, she said, adding that she hopes the center's 50 employees - 12 salaried and 38 hourly workers - can get jobs with similar centers or programs.

A Grace Place operates in a leased, 25,000-square-foot building at 8030 Staples Mill Road, where its clients go during the day and get such services as nursing care, exercise programs, and arts and crafts.

The center was founded in 1967 by Louis Michaux, a Richmonder who struggled with cerebral palsy and saw a need for a place where people with disabilities could go to improve their health, social engagement and independence.

A Grace Place estimated its assets at $100,000 to $500,000 and liabilities of $1 million to $10 million, court filings show.

As of Feb. 28, A Grace Place had cash and cash equivalents of $331,990, net accounts receivable of $168,601, prepaid expenses of $31,105, and current liabilities of $266,984, according to the court documents.

In court documents and in a statement released Friday, A Grace Place said "a confluence of external factors" led to the decision to close, including changes in Medicaid reimbursements that resulted in "a substantial reduction in what the agency was able to retain."

A majority of its clients are on Medicaid.

Also, a shift from a government-based system of care to a privatized one led to additional administrative costs and increased the center's financial obligations "beyond what was sustainable."

"Increasing regulatory requirements and operating costs, paired with stagnant reimbursement rates for programs that support seniors and those with disabilities - Medicaid, in particular - were the tipping point behind this regrettable decision," said Mark Tripodi, chairman of A Grace Place's board of directors

"While other agencies have switched to a private-pay model to address these challenges, we remained committed to our Medicaid base."

"Though we endeavored to close the gap with private dollars, our frank analysis concluded that we would not be able to do so in a sustainable way," Tripodi said.

The center has no long-term debt or secured debt, but it is negotiating with the Virginia Department of Medical Assistance Services for a liability resulting from an audit of services billed Sept. 1, 2012, to Nov. 30, 2013, according to the court filing.

The liability is $500,000, Seward said, and A Grace Place has been working with state officials on a plan to pay it.

The court filing includes a motion to pay prepetition wages to its employees.

jblackwell@timesdispatch.com(804) 775-8123