The lawsuit, filed by lawyer Max Wistow on behalf of the receiver for the roughly 2,700 participants in the pension plan for current and retired employees of Fatima Hospital and the former St. Joseph Hospital, accused a series of defendants of fraud and conspiracy. Over time, all of the defendants have settled except for the Diocese of Providence.
Wistow told The Public’s Radio he expects dates to be established this week for mediation with the Diocese. The mediation will be led by Frank Williams, a former chief justice of the Rhode Island Supreme Court, Wistow said.
“We’re optimistic that something can happen,” Wistow said. The participants in the troubled St. Joseph’s pension plan “are quite ready to see an end to that aspect of the case and we hope that that desire is shared by the bishop and the diocesan defendants.”
A spokesman for the Diocese of Providence could not be immediately reached for comment.
In 2018, the Diocese argued that the pension plan was “orphaned” when California-based Prospect Medical Holdings acquired CharterCare, the parent of Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence, in 2014.
The pension plan went into receivership about three years later, and pensioners were told their under-funded pensions might have to be slashed by 40 percent.
The Diocese of Providence said it was not responsible.
In a 2018 statement, the diocese pointed to the 2014 deal involving Prospect Medical Holdings: “Please keep in mind that these corporate transactions took several years and involved detailed negotiations of boards of directors, hospital administrators, attorneys, actuaries, consultants, and canonists,” the Diocese said in 2018. “They were fully vetted and approved by state officials, including the Attorney General and the Department of Health, and were supported and recommended for approval by the nurses’ union.”
In a 2017 interview with the Rhode Island Catholic, Bishop Thomas Tobin said he did not believe the Diocese had a moral obligation to the pension participants. “The only entity that can improve the condition of the pension funds now is Prospect Medical Holdings,” Tobin said. “They’re a billion-dollar for-profit corporation.”
After settlements by other defendants, Prospect Medical agreed to a $27 million settlement earlier this year. That settlement was recently approved by U.S. District Court Judge William Smith.
Now, the Diocese of Providence is the only remaining defendant in the case.
Prospct Medical won approval for a change in its ownership structure earlier this year, after agreeing to Rhode Island Attorney General Peter Neronha’s demand that the company create an $80 million escrow account to ensure the operation of Fatima and Roger Williams hospitals.
Ian Donnis can be reached at idonnis@ripr.org. Follow him on Twitter @IanDon. Sign up here for his weekly RI politics and media newsletter.
