Home Industries Health Services Federal bankruptcy court approves sale of Prospect’s R.I. hospitals

Federal bankruptcy court approves sale of Prospect’s R.I. hospitals

By

Katie Castellani

-

02/12/2025

Our Lady of Fatima Hospital — A FEDERAL BANKRUPTCY judge granted approval for the sale of Prospect Medical Holdings Inc.'s two Rhode Island hospitals, Roger Williams Medical Center and Our Lady of Fatima Hospital, pictured, on Feb. 12. The sale must still be approved by the U.S. Department of Justice. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – The sale of Prospect Medical Holdings Inc.’s two Rhode Island hospitals cleared a crucial hurdle Wednesday, earning approval from a federal bankruptcy judge. Prospect and The Centurion Foundation, the potential buyer of Roger Williams Medical Center and Our Lady of Fatima Hospital, filed an amended sale agreement Feb. 3 looking to fast-track the

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PROVIDENCE – The sale of Prospect Medical Holdings Inc.’s two Rhode Island hospitals cleared a crucial hurdle Wednesday, earning approval from a federal bankruptcy judge. Prospect and The Centurion Foundation, the potential buyer of Roger Williams Medical Center and Our Lady of Fatima Hospital, filed an amended sale agreement Feb. 3 looking to fast-track the transaction, which has been in the works for years. The sale must be approved by a federal bankruptcy judge because Prospect, which has a long history of financial challenges, filed for Chapter 11 bankruptcy in January. Several companies and agencies, including the U.S. Centers for Medicare and Medicaid Services, objected to the new sales agreement. But Prospect and Centurion were able to resolve those disputes, as well as concerns expressed by the R.I. Department of Health and R.I. Attorney General Peter F. Neronha’s office, through a new sale agreement filed Wednesday morning. Specifically, the new agreement adds that the sale can only close if Prospect and Centurion satisfy the many conditions RIDOH and Neronha’s office added to its approval of the transaction in June 2024. “The bankruptcy court’s approval of this sale provides reason for cautious optimism,” Neronha said in a statement Wednesday. “All parties came to the table to prioritize moving these hospitals away from private equity and returning them to local control. At the same time, we can still stop the closing if any of our HCA Decision conditions are not met. Currently, several information requests from the State remain unfulfilled, including those involving critical financial information. My Office will stay vigilant to ensure that our conditions are fully adhered to.” On Jan. 11, Prospect Medical Holdings, a California-based private equity firm that owns the hospitals, filed for Chapter 11 bankruptcy. This comes as a $193 million deal to sell the hospitals to Centurion, a Georgia-based nonprofit, was set to close in January. Prospect has more than 100,000 creditors and between $1 billion and $10 billion in assets and liabilities each, according to court filings. The bankruptcy comes after media outlets reported Prospect was working with a restructuring adviser to address the company’s finances. Since then, many hospital leaders and lawmakers have raised concerns about the future of the safety net hospitals. “These hospitals are critical to our communities. They have tens of thousands of emergency visits every year, many of which are behavioral health related,” the lawmakers said in a Jan. 16 statement. “They are one of the largest inpatient behavioral health providers in the state. Their closure would have devastating impacts on our communities and other hospitals in the area, potentially creating serious access to critical care issues.” Roger Williams in Providence and Fatima Hospital in North Providence account for 20% of the state’s hospital bed capacity, according to previous Providence Business News reporting. The hospitals have recorded more than 10,000 annual admissions and 53,000 emergency department visits in recent years. They also treat largely underserved communities and about 70% of patients rely on Medicare or Medicaid, a rate higher than at Brown University Health and Care New England Health System hospitals. “These safety net hospitals are absolutely critical for maintaining delivery of safe, affordable and accessible health care services in Rhode Island,” Neronha said. “Roger Williams and Fatima provide services to largely underserved and underinsured communities, and we must maintain their viability. And in order for us to give these hospitals a fighting chance, our conditions must be met.” The sale must still be approved by the U.S. Department of Justice within 14 days. Also, an attorney for Prospect told the judge the sale is expected to close within 30 to 60 days. However, Centurion must still get the financing it needs to purchase the hospitals, which is expected to take four to six weeks. Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.