Prospect Medical Holdings, the California-based owner of two cash-strapped safety net hospitals in Rhode Island, faces a possible bankruptcy filing, a move that would spell added uncertainty for Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence.
Prospect’s exploration of restructuring was reported by The Wall Street Journal, which said the company had recently missed rent payments to landlord Medical Properties Trust.
An Atlanta-based nonprofit, the Centurion Foundation, has received state approval to buy Prospect Medical’s two Rhode Island hospitals, but Centurion is still working to line up its financing for the deal.
If Prospect Medical pursues bankruptcy, that would spell additional delays for the sale of the hospitals in Rhode Island.
A Centurion spokesman, who was formerly the spokesman for Prospect’s RI hospitals, did not respond to a request for comment.
In a statement, Attorney General Peter Neronha said Prospect Medical’s financial problems reflect what he called “the devastating effects of private equity on our healthcare system.”
More information about a possible bankruptcy should be forthcoming in the next few days, he said.
Neronha said his office has taken significant steps to seek a better outcome for Roger Williams Medical Center and Our Lady of Fatima Hospital.
“These hospitals are well-positioned should Prospect file for bankruptcy,” he said, “because of the steps my office has taken, with support from the General Assembly, in holding Prospect’s feet to the fire every step of the way — including hiring an experienced bankruptcy attorney in the Office, and retaining the law firm of Pillsbury, Winthrop, Shaw and Pittman, led by Andrew Troop, who represented the interests of the State of Massachusetts when Steward filed for bankruptcy.”
At the same time, even with a change in ownership, it remains unclear if the two Rhode Island hospitals — which have lost money for years — can remain in business.
Prospect was initially seen as a savior when it bought Roger Williams and Fatima in 2014.
Over time, the company was criticized for disinvesting in its chain of hospitals around the U.S. while paying hundreds of millions in dividends to investors.
By November 2023, the company was not meeting operating costs for the two Rhode Island hospitals.
