PROVIDENCE – The General Assembly on Tuesday unanimously approved an $18 million transfer to help close the sale of Roger Williams Medical Center and Fatima Hospital to The Centurion Foundation in time to meet a Feb. 27 deadline imposed by a federal bankruptcy court.
The legislation, which Gov. Daniel J. McKee is expected to sign into law, transfers $18 million in the state’s supplemental “rainy day” fund to as backstop support for bonds to be issued by the Rhode Island Health and Educational Building Corp.
Though it won state approval in June 2024 to purchase the hospitals from bankrupt Prospect Medical Holdings, Centurion has since struggled to secure private investors to back the bonds it needs to close the deal.
Ben Mingle, CEO and president of Centurion, issued a statement thanking lawmakers for their support and noting that the funding "will keep us on track for closing this transaction by the end of February."
Sen. Louis P. DiPalma, D-Middletown, said the hospitals' role in the state’s health care system has rendered them “too big to fail.”
The hospitals are losing roughly $45 million a year. And Centurion executives had said state support to secure the bonds was crucial for attracting investors while preserving 2,700 jobs and more than 500 hospital beds.
The legislation received the support of the Rhode Island Medical Society, Rhode Island Physicians Academy of Family Physicians, and the Hospital Association of Rhode Island.
Lisa P. Tomasso, senior vice president of the Hospital Association of Rhode Island, testified that assuring the financial stability of the hospitals and maintaining continuity of services “is vital to public health and the overall stability of the state’s health care system.
“The emergency and behavioral health services provided at these hospitals, in particular, cannot be absorbed elsewhere in the system,” she said.
Covering two years of debt service on the 30-year bonds, the state will have no obligation to replenish the debt-service reserve fund, which will serve as a backup for the bonds should Centurion become unable to make its debt payments, and only after it has used $9 million set aside from the bond sale for the same purpose.
January 2025 court filings showed Prospect owed more than $1 billion to over 100,000 creditors.
Additional legislation may be needed, said Rep. Charlene Lima, D-Cranston, accusing the for-profit Prospect hospital chain of “probable malfeasance and negligence” in their financial management that has trickled down to many doctors and vendors left holding the bag.
Lima said many doctors in the state who worked with Prospect are now in dire financial straits. She knows of at least one who has already filed for bankruptcy.
“Let’s fix this,” she said.
Christopher Allen is a PBN staff writer. You can contact him at Allen@PBN.com.
