PROVIDENCE – The Prime HealthCare Foundation, which last month publicly emerged as an 11th-hour potential buyer for Roger Williams Medical Center and Our Lady of Fatima hospitals, has withdrawn its bid amid cost concerns.
Original suitor The Centurion Foundation, which has struggled for almost a year to secure necessary financing, now remains as the only potential buyer for the hospitals.
Both hospitals are at risk of closing after the end of the year at the request of owner Prospect Medical Holdings, parent company of Providence-based CharterCARE Health Partners. The for-profit health system declared bankruptcy in January and in late October filed a motion in a Texas federal court requesting to close the hospitals if the state of Rhode Island or a designee does not take over.
The hospitals' fate could be determined as early as tomorrow, says R.I. Attorney General Peter F. Neronha, who on Thursday morning confirmed Prime's exit.
Prime separately told R.I. Attorney General Peter F. Neronha and Prospect yesterday "that they view the collective hurdles presented by the proposed transaction as too big a challenge for them to take on at this time," Neronha said in a statement, "and that they wanted to see how the Centurion transaction played out. I told them that I understood, and I do."
The Prime Healthcare Foundation, the nonprofit arm of California-based for-profit health system Prime Healthcare Inc., has worked with Prospect over the past few weeks "regarding how to address (and whether they would assume) about $90 million in post-bankruptcy petition expenses which someone (certainly not the state) will have to pay or otherwise address," Neronha said.
Atlanta nonprofit The Centurion Foundation has said it will cover those expenses if they close the sale, he added.
Centurion president and CEO Benjamin said via email that the nonprofit "remains completely committed and focused on its financing plan and timetable and looks forward to addressing the court tomorrow with more detail."
Prime spokesperson Noel True said in a statement that the Prime Healthcare Foundation's board of directors now "believes it is most appropriate to allow the state, its partners, and all involved stakeholders to continue through the current process.
"This decision was not made lightly, and we care deeply about ensuring access to care and our mission of 'saving hospitals, saving jobs, and saving lives,'" True continued. "We are honored to continue to serve Rhode Island at Landmark Medical Center, which was saved from bankruptcy and is now award-winning for its quality and social responsibility.”
Prime purchased Landmark Medical Center in Woonsocket in 2013, and earlier this week secured a $2 million settlement from the city. The agreement resolves a dispute related to city tax assessments and bills.
R.I. Secretary of Health and Human Services Richard Charest formerly served as CEO and president of Landmark and facilitated Prime's interest as a potential buyer of Roger Williams and Our Lady of Fatima hospitals.
Centurion CEO Benjamin Mingle last month accused the state of "unlawfully interfering" in the sale through these talks with Prime. In response, Neronha defended the state's right to explore other options amid urgent circumstances. The two hospitals, located in Providence and North Providence, host about 500 beds between them.
Charest also could not immediately be reached for comment.
Olivia DaRocha, a spokesperson for Gov. Daniel J. McKee's office, said in a statement that "keeping these hospitals open remains our top priority," and that the state "will continue to work towards securing a buyer to complete a deal.
"Centurion has the opportunity to demonstrate to the bankruptcy court that it can complete a responsible and sustainable transaction," DaRocha said. "Depending on the court’s determination, nothing would prevent Prime from reengaging if the Centurion transaction does not advance."
Neronha said that his office has not participated in the conversations between Centurion and Prime, but that he has spoken with Prime and the R.I. Department of Health about "what I view as certain necessary commitments regarding capital improvements, assumption of existing labor contracts, preservation of existing lines of medical services, who would cover anticipated losses while they managed but did not yet own the hospitals, a management fee they would be paid (none versus how much), and more."
Centurion maintains "an opportunity to close this deal and their ability to do so is rapidly coming to a head, perhaps as early as this Friday when they will need to convince the Texas bankruptcy court that they can," Neronha added.
Neronha will attend that hearing virtually.
(UPDATE: Adds comment from Centurion in 8th paragraph)
Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.
