Last Friday, Rhode Island Attorney General Peter Neronha P’19 P’22 announced that his office would designate up to $3 million to fund the operations of two struggling R.I. hospitals through the end of November.
The agreement was made with California-based Prospect Medical Holdings, the owner of regional health network CharterCARE Health Partners, and the funds will come from the Neronha-controlled $51 million Hospital Fund.
CharterCARE operates Our Lady of Fatima Hospital in North Providence and the Roger Williams Medical Center in Providence, which — as a result of the agreement — will now have enough money to remain open until the end of the month.
Still, the long-term solvency of Fatima Hospital and Roger Williams remains uncertain, and Prospect’s yearslong effort to sell the two hospitals has seen the entrance of a new potential buyer.
The relief funding comes amid a six-month lag in Prospect’s sale of the CharterCARE system — including the two hospitals — to the Georgia-based Centurion Foundation. In June 2024, Centurion secured conditional approval to purchase the two hospitals so long as it met a total of 85 conditions set by Neronha and the Rhode Island Department of Health.
The tentative purchase agreement had been a large step in Prospect’s campaign to sell Fatima Hospital and Roger Williams, which followed a 2021 ProPublica investigation that had revealed that Prospect — under the partial ownership of Leonard Green & Partners — was profiting while its hospitals lacked adequate patient-care resources. At the time, Prospect’s two R.I. hospitals were also facing nearly $90 million of net operating losses between fiscal year 2015 and fiscal year 2020.
Prospect itself had declared bankruptcy early this year amid allegations of not providing adequate medical supplies, underfunding facilities and mismanaging hospitals, The Herald previously reported.
But while the conditional sale offered a potential resolution, Centurion, just last month, failed to secure adequate funding for the transaction before an Oct. 31 deadline — a requirement set by Neronha to move forward with the sale.
A day before the deadline, Prospect filed a motion requesting to transfer control of the hospitals to the state, or to close the facilities before January.
Now, state leaders have moved to find a new buyer, specifically reaching out to Prime Healthcare — the fifth largest for-profit health care system in the country — about potentially buying the hospitals.
But state leaders have faced backlash from nurses and other health care professionals for considering Prime Healthcare as a potential buyer.
On Tuesday, the United Nurses and Allied Professionals — which represents about 1,200 of the two hospitals’ nurses — called on state leadership to stop “unlawfully interfering” with Prospect’s conditional sale of the hospitals to Centurion.
In 2021, Prime Healthcare entered into a $37.5 million settlement after it overpaid a physician to acquire his practice so that he would refer patients to one of Prime Healthcare’s California hospitals.
Prime Healthcare Foundation — a nonprofit affiliated with Prime Healthcare — is currently conducting a “focused, rapid assessment to determine how it can best ensure continued access to high-quality, compassionate care for the people of Rhode Island,” Prime Healthcare Spokesperson Noel True wrote in a statement to The Herald.
In responding to the six-month delay, CharterCARE has already spent $18.7 million in additional operating costs to keep the hospitals open. Prior to the Nov. 7 short-term financing agreement, the health system expected to lose an additional $6 million by the end of November, according to a court filing.
Both Fatima Hospital and Roger Williams are “irreplaceable safety net hospitals in Rhode Island’s health care system,” wrote CharterCARE spokesperson Otis Brown in a statement to The Herald, explaining that the facilities treat an underinsured patient population.
The two hospitals see 50,000 emergency room visits annually, according to the court filings. Roger Williams also houses the only accredited bone marrow transplant unit in Rhode Island, according to Otis Brown.
Anthony Vega, a City of Providence spokesperson, wrote in an email to The Herald that “Roger Williams Hospital is essential to Providence, and keeping it open is critical.” He added that the city “has done what it can to assist in the court process.”
Otis Brown noted that Centurion has continued working with all parties to close the sale and transition the hospitals out of bankruptcy.
“We encourage this administration to keep their eye on the ball and do whatever it takes to close the Centurion deal immediately,” UNAP General Counsel Chris Callaci wrote in an email to The Herald.
“We’ll continue to work in good faith with Centurion,” wrote Olivia DaRocha, a spokesperson for Gov. Dan McKee, in a statement to The Herald. “We are also developing a Plan B to ensure the hospitals remain open if that deal does not move forward.”
“This is the responsible step for our administration to take,” DaRocha added.
