Owner of two local hospitals files for bankruptcy

PROVIDENCE, R.I. (WJAR) — The parent company of Our Lady of Fatima Hospital and Roger Williams Medical Center has filed for bankruptcy, according to court filings.

Prospect Medical Holdings filed for bankruptcy in a Dallas federal court Friday afternoon.

In response to the news, Rhode Island Attorney General Peter Neronha released the following statement:

This morning, my Office was advised that Prospect has filed for Chapter 11 bankruptcy in the federal bankruptcy court in Dallas, Texas. In a press release issued late last night, Prospect stated that its proposed bankruptcy plan includes going forward with the sale of Roger Williams and Fatima to the Centurion Foundation. For the immediate future, we expect our Rhode Island hospitals to operate as normal. I know that the word “bankruptcy” can be frightening to many, especially when paired with a potentially unknown future of two hospitals that are integral to the survival of Rhode Island’s healthcare system. But I’ll say again what I said earlier this week: this Office is prepared for all scenarios. The possibility of this filing is not new to us; in fact it has been looming for some time. And we have stepped up our preparations as the filing seemed to become more likely. We will be in Texas to represent the interests of Rhode Islanders, with only one goal: to ensure that these hospitals, through the work of their outstanding employees, continue to deliver high quality healthcare to the people of Rhode Island.” I want to make one thing clear: the only thing that has changed here is the circumstances. Since 2021, my Office has been deeply committed to ensuring that these hospitals stay open and able to provide quality healthcare to Rhode Islanders. We will continue to help facilitate the responsible transfer of these hospitals to new ownership, leaving behind the dark days of private equity ownership, which is inherently destructive, and moving towards a future where we give our safety net hospitals a fighting chance. This is personal to me, as I know it is to Rhode Island residents. I have a couple of physicians in my family who regularly relay to me the challenges of providing quality care in the current healthcare landscape. And I’m certainly well aware of the struggles of our failing system here in Rhode Island. This is tough stuff, but it can and should serve as a catalyst for Rhode Island leadership to meet the moment and attempt to provide real solutions, not just lip service. We will share more as we learn more, but know that we’re ready for this, and we will see this through here in Rhode Island and in person in the Northern District of Texas. We will share updates as we learn more information.

Meanwhile, Sen. Sheldon Whitehouse (D-RI) also released a statement, saying:

Bad outcomes for patients and providers are par for the course when private equity firms take over hospitals. On the Budget Committee, we investigated what happens when private equity companies and health care operators like Prospect take over facilities and bleed them dry, and the end result is almost always harmful both to patients and to hardworking hospital staff. The positive news for Rhode Islanders is that the conversion process for local Prospect-owned hospitals was already well under way, and disruption to the state’s health care system can be minimized. But as we make decisions about our health care system moving forward, we need to be very clear that the priorities for a hospital must be its patients and workers – not greedy private equity investors.

This is a developing story. Stay with NBC 10 News for the latest.