
PROVIDENCE – Several lawmakers in the R.I. House of Representatives are raising concerns about the fate of Roger Williams Medical Center and Our Lady of Fatima Hospital in the wake of their owner filing for bankruptcy.
On Jan. 11, Prospect Medical Holdings Inc., 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 The Centurion Foundation, a Georgia-based nonprofit, was set to close this month.
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“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 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.”
The hospitals also serve thousands of Medicaid and Medicare patients who may be challenged in seeking care at other hospitals, according to the lawmakers’ statement.
“We applaud the strong support of the Attorney General and Department of Health to closely monitor the bankruptcy and hope that the court process can be expedited to approve the sale of these hospitals to Centurion and separate from Prospect once and for all,” lawmakers said in the statement.
In June 2024, the R.I. Department of Health and Attorney General Peter F. Neronha’s Office approved the sale with dozens of conditions. Prospect, which operates dozens of facilities across the U.S. and has faced financial struggles, has been trying to sell its Rhode Island assets for years.
Sen. Jacob Bissaillon, D-Providence, whose district includes Roger Williams, expressed concerns about the potential effects that Prospect’s bankruptcy filing could have on the hospitals.
“Rhode Islanders deserve stability, access to quality care and a future for these vital community hospitals that prioritizes their well-being over profit,” Bissailon said, commending Senate President Dominick J. Ruggerio for his work with RIDOH and Neronha’s office in policy concerning the hospitals.
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.
In 2017, the value of the company’s assets nationwide exceeded its liabilities by about $67 million, Providence Business News reported in a June 2024 cover story. By 2020, Prospect was in dire straits, with liabilities exceeding assets by $1 billion. On top of this, records show Roger Williams Medical Center and Fatima Hospital were losing millions annually from 2021 to 2023. Additionally, court filings show Prospect’s facilities deteriorated and the company was behind on payments to vendors.
Prospect paid off $17 million in overdue bills in July 2024 after Neronha’s office filed a motion to hold the company in contempt of a court ruling ordering it to pay the bills.
Prospect previously said that paying off its bills could force the company – which previously revealed it was under investigation by the U.S. Department of Justice – into bankruptcy.
On Jan. 14, a judge granted Prospect access up to $100 million in new loans, with $29 million available immediately. The loans are crucial not only to Prospect’s restructuring but also to “maintain the health and safety of their patients,” Paul Rundell, Prospect’s chief restructuring officer, said in court documents.
Neronha expects Prospect’s Rhode Island hospitals will continue operating as usual.
“I want to make one thing clear: The only thing that has changed here is the circumstances,” Neronha said in a Jan. 12 statement. “We will continue to help facilitate the responsible transfer of these hospitals to new ownership, leaving behind the dark days of private equity ownership, which is inherently destructive, and moving towards a future where we give our safety net hospitals a fighting chance.”
Prospect said its hospitals, medical centers and physician offices will stay open throughout the bankruptcy and care will be uninterrupted.
Representatives who issued the statement included: Edith Ajello, D-Providence; Nathan Biah Sr., D-Providence; Rebecca Kislak, D-Providence; Anthony DeSimone, D-Providence; Raymond Hull, D-Providence; Enrique Sanchez, D-Providence; Scott Slater, D-Providence; Grace Diaz, D-Providence; Ramon Perez, D-Providence; Charlene Lima, D-Cranston; Jacquelyn Baginski, D-Cranston; Joseph Solomon Jr., D-Warwick; Evan Shanley, D-Warwick; Deborah Fellela, D-Johnston; Gregory Constantino, D-Lincoln; Mary Ann Shallcross Smith, D-Lincoln; Jon Brien, D-Woonsocket; William O’Brien, D-North Providence; Arthur Corvese, D-North Providence; Karen Alzate, D-Pawtucket; and Alex Finkelman, D-Jamestown.
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.