Why Insurance Companies Are Struggling Financially

BlueCross BlueShield of Tennessee has terminated its reimbursement agreement with Henley’s Mobility Supply, forcing the Chattanooga-based durable medical equipment provider to cease operations and lay off its entire workforce, company officials confirmed in April 2026.

The decision, communicated to Henley’s in early April, ended a multi-year contract under which BlueCross reimbursed the supplier for wheelchairs, hospital beds, and other assistive devices provided to plan members across Tennessee. Without this revenue stream, which accounted for approximately 70 percent of Henley’s annual billing, the company stated it had no viable path to continue operations.

“At the end of the day, it’s about money,” said Jim Henley, founder and president of Henley’s Mobility Supply, in an interview with the Chattanooga Times Free Press on April 15, 2026. “BlueCross apparently was persuaded to reassess the cost structure of our services, and they determined they could no longer sustain the reimbursement rates we required.”

Henley’s Mobility Supply, founded in 1988, employed 62 full-time workers at its Chattanooga headquarters and maintained a network of 18 service technicians across East Tennessee. The company specialized in complex rehabilitation technology, including custom seating systems and powered mobility devices for individuals with spinal cord injuries, cerebral palsy, and other chronic conditions.

BlueCross BlueShield of Tennessee, the state’s largest commercial health insurer with over 2.5 million members, did not disclose specific financial terms of the terminated agreement. In a statement to local media, the insurer said it routinely reviews provider contracts to ensure alignment with “evidence-based coverage policies and sustainable reimbursement frameworks.”

The termination reflects broader pressure on durable medical equipment (DME) providers nationwide, as insurers scrutinize utilization and costs in the post-pandemic healthcare landscape. According to a 2025 report by the Medicare Payment Advisory Commission, DME spending grew 4.1 percent annually between 2019 and 2023, prompting increased prior authorization requirements and competitive bidding programs in multiple states.

Tennessee does not operate a state-wide competitive bidding program for DME, but BlueCross has implemented its own utilization management policies since 2022, including stricter documentation requirements for power wheelchairs and limits on certain accessory reimbursements. Industry analysts noted that these changes have disproportionately affected small, specialized suppliers like Henley’s, which lack the scale to absorb reduced margins or navigate complex appeals processes.

Following the contract termination, Henley’s notified clients on April 10, 2026, that it would no longer accept new orders or provide maintenance on existing equipment. The company advised patients to contact their care coordinators at BlueCross or alternative in-network suppliers for continuity of care. As of April 18, no formal bankruptcy filing had been recorded with the U.S. Bankruptcy Court for the Eastern District of Tennessee.

Jim Henley said he is exploring options to restructure the business around private-pay services or partnerships with nonprofit organizations, but acknowledged that replicating the insurance reimbursement volume would be difficult. “We built this company to serve people who need complex mobility solutions, not to fight over billing codes,” he said. “If the insurance model won’t support that mission, then we have to ask whether the model itself needs to change.”