A financing gap delaying the sale of two cash-strapped Rhode Island hospitals is expected to be resolved under a decision announced Thursday by Attorney General Peter Neronha.
More than two years have passed since the Atlanta-based Centurion Foundation submitted an application to buy CharterCARE Health Partners, composed mostly of Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence.
After winning state approval, with a series of conditions, Centurion financed the proposed acquisition with what was planned as a sale of up to $160 million in bonds that was initially due to close in May.
But a shortfall in the financing prompted Centurion and its CEO, Ben Mingle, to negotiate with the attorney general’s office, Neronha told The Public’s Radio Wednesday.
Neronha’s office said the revised decision allows for what it calls a modified bond financing strategy “in light of challenges in the bond market,” while adding additional safeguards to protect the CharterCARE system.
Roger Williams and Fatima have lost money for years, at a time when Rhode Island’s largest hospital groups have increasingly struggled with lower reimbursement rates for public and private insurance than in neighboring Massachusetts and Connecticut.
“What makes all of this very difficult is a very difficult healthcare market,” Neronha said. “I wouldn’t want to be any healthcare system going out on the marketplace to try to sell bonds in this healthcare environment.”
Chris Callaci, general counsel for United Nurses and Allied Professionals, the union representing health care workers at the two hospitals, said UNAP’s lobbyist Guy Dufault told him that Centurion’s funding gap was thought to be in the neighborhood of $15 million to $20 million.
Neronha said negotiations were still ongoing as of Wednesday and that his top concern was ensuring adequate funds for capital improvements and operating funds to maintain Roger Williams and Fatima.
He added: “If we need additional protections to ensure the future of these hospitals, then that’s going to be the price of any changes.”
Centurion spokesman Otis Brown did not respond to a request for comment Wednesday.
Centurion has touted a plan to revive Roger Williams and Fatima after years of struggle and financial losses.
The Georgia-based non-profit is trying to acquire the hospitals from Prospect Medical Holdings of California, which filed for bankruptcy in January and has been criticized for placing investors’ needs over those of patients.
The health care workers union opposed the foundation’s plan to acquire CharterCARE, arguing that it is unlikely to succeed, and questioned the financing of the deal with debt. “Our concerns remain undiminished,” Callaci said.
This story has been updated.
