PROVIDENCE – An agreement to keep Roger Williams Medical Center and Our Lady of Fatima Hospital open through November has been extended to the end of the year.
The deal, reached on Tuesday by the state of Rhode Island and hospitals owner Prospect Medical Holdings Inc., cements the hospitals' continuing operations through Dec. 31.
But the future remains murky. In January, California-based Prospect Medical Holdings filed for chapter 11 bankruptcy, placing the fate of the hospitals, long troubled by financial turbulence, into limbo.
Atlanta-based nonprofit The Centurion Foundation had expressed interest in buying the hospitals, but has failed to secure adequate funding. Centurion also drew concern among some for its lack of experience running a health care facility.
On Oct. 30, Prospect filed a motion in the U.S. Bankruptcy Court for the Northern District of Texas requesting to to close the hospitals if the state or another designee does not take ownership. R.I. Attorney General Peter F. Neronha flew to Texas to oppose the closures in a hearing earlier this month, and the two parties reached an agreement to keep the hospitals open through November, with Rhode Island paying up to $3 million toward Prospect's anticipated $6 million loss for the month.
At the time of this hearing, California-based Prime Healthcare Foundation, the nonprofit arm of for-profit Prime Healthcare Inc., publicly emerged as another interested buyer. R.I. Secretary of Health and Human Services Richard Charest, who the state says has facilitated Prime's interest, formerly worked as CEO and president of Prime-owned Landmark Medical Center in Woonsocket.
Thomas R. Califano, an attorney with Sidley Austin LLP representing Prospect, said that the health system is “proceeding down both paths at the same time” with the interested buyers.
Califano said that negotiations are “progressing well,” and that he anticipates a full resolution well before Dec. 31. The parties will meet again in a telephonic hearing next Monday or Tuesday.
Under the latest agreement, Rhode Island will once again contribute to half of Prospect's operating losses in December. December's losses may be lower than November's $6 million estimate, Califano said.
In a statement, The Centurion Foundation CEO Ben Mingle said that the nonprofit remains committed to acquiring the two hospitals.
"In response to today's bankruptcy hearing, nothing has changed regarding Centurion's focus on our financing strategy to close this sale as quickly as possible," Mingle said. "Our partners, including Bank of America and RIHEBC, have been equally committed to this plan and we are moving quickly to execute.
"Again, Centurion is the only buyer approved by the Department of Health and Attorney General who has agreed to all conditions and our business plan to help stabilize finances and operations," Mingle continued. "We are also the only mission-driven option to return CharterCARE to true not-for-profit status with a local majority board and management team, committed to supporting charitable community endeavors."
Meanwhile, Charest has characterized Prime as having "a unique ability to save and improve hospitals in times of crisis nationally and ensure award-winning quality, equity and access for communities.
"Time and time again they have saved hospitals even amidst the greatest challenges and have the national scale, leadership, clinical quality and dedication to charitable care that can ensure these hospitals continue their missions," Charest said in a statement earlier this month.
The United Nurses and Allied Professionals, which represents more than 1,200 employees across Our Lady of Fatima Hospital, Roger Williams Medical Center, and Prospect Home Health and Hospice, last week said that Charest's words "intentionally mislead the public about Prime’s record."
The union called on the state to focus on finalizing the sale with The Centurion Foundation.
Olivia DaRocha, a spokesperson for Gov. Daniel J. McKee, said at the time that the state is focused on keeping both hospitals open rather than favoring one of the buyers.
Neronha's office did not immediately return a request for comment on Tuesday.
Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.
