PROVIDENCE – Roger Williams Medical Center and Our Lady of Fatima Hospital in North Providence will retain approximately $45 million in escrow noted in minor some minor amendments to the Hospital Conversions Act decision from June that conditionally approves the sale of the two hospitals Georgia-based nonprofit Centurion Foundation, R.I. Attorney General Peter F. Neronha announced Friday.
Neronha’s office says the amendments, which concludes the attorney general’s review, address some of the 40 conditions within the
decision made by the state over the summer to give preliminary approval to the sale of Roger Williams and Fatima to Centurion. At the time, Neronha set those conditions to address the “currently precarious status quo,” including having Centurion and seller Prospect Medical Holdings Inc. guarantee they will add $80 million in cash financing to the hospitals’ books.
The conditions also included contributing an additional $66.8 million to a dedicated fund to support the hospitals themselves, not for executive compensation or management fees. That fund Neronha said on Friday will include all of the remaining escrow – approximately $45 million plus interest – from Roger Williams and Fatima.
The announcement is another layer to the longstanding matter of selling the two hospitals. A week prior to the state giving its early blessing on the sale, Providence Superior Court Justice Brian Stern ordered Prospect Medical Holdings Inc. to
pay more than $17 million to vendors within 10 days after being found it violated multiple terms of a 2021 sale agreement. Prospect said in early July it
paid off its overdue hospital bills, but Neronha
filed a motion asking Stern to hold Prospect in contempt of court arguing his office had at the time not yet “received sufficient evidence” that Prospect has paid its vendors. Neronha
dropped that motion in August after Prospect showed it complied with the judge’s payment order.
Back on Nov. 13, Prospect unloaded Prospect Health Services RI Inc., a local medical group, as part of
a $745 million sale to California-based Astrana Health Inc.
Other conditions that were amended include that terminations for cause and/or promotions may be executed without prior notice but requires that Neronha’s office to be notified within 14 days after such actions were performed and allowing for an alternative mechanism of annual financial reporting compliance that is sufficient to allow for appropriate oversight of Centurion’s financial condition by Neronha’s office.
“Specifically, in the event that Centurion does not produce audited financial statements in a given year, Centurion shall produce unaudited financial statements prepared by an independent third-party certified public accountant,” Neronha said.
Neronha also said the R.I. Department of Health is reviewing change in effective control applications from the applicants – which is in addition to the HCA review process. He said a CEC application must be filed by transacting parties with RIDOH “when the owners of a hospital [and certain other health care facilities] in Rhode Island want to transfer 50% or more of the ownership, assets, membership interest, authority, or control of the hospital.
James Bessette is the PBN special projects editor, and also covers the nonprofit and education sectors. You may reach him at Bessette@PBN.com. You may also follow him on X at @James_Bessette.