The for-profit Prospect Medical Holdings, which owns hospital amenities in California, Pennsylvania, Rhode Island, and Connecticut, has filed for Chapter 11 chapter within the U.S. Chapter Court docket for the Northern District of Texas.
The corporate stated it plans to concentrate on its operations in California and to promote the Roger Williams Medical Heart and Our Woman of Fatima Medical Heart in Rhode Island and proceed working with the Commonwealth of Pennsylvania to agree on phrases for the divestiture of the Crozer-Chester Medical Heart.
WHYY in Philadelphia reviews that in an e-mail despatched to Crozer staff, Prospect CEO Von Crockett cited a variety of challenges, together with the “lingering impacts of the COVID-19 pandemic, inflation, a big cyberattack and elevated denials from well being plans” because the impetus behind its determination.
The Crozer system had 4 hospitals at one time, however is down to simply two now. WHYY reviews that state officers and native legislators “have sparred with hospital administration in recent times as Prospect slashed providers and wards inside Crozer.” WHYY stated the chapter doubtless places a pause on the Pennsylvania Workplace of Legal professional Common’s go well with, filed in October in opposition to Prospect, accusing the corporate of mismanagement and “company looting.”
CBS Information reported that Prospect Medical’s chapter comes lower than a 12 months after the chapter of Steward Well being Care, one other main hospital system as soon as backed by non-public fairness. Together with Steward, Prospect Medical has been one focus of a CBS Information investigation revealing how non-public fairness buyers have siphoned lots of of tens of millions of {dollars} from neighborhood hospitals. CBS Information stated that among the many similarities between Prospect Medical and Steward is that each of them relied on the worth of their hospital actual property to assist finance giant payouts for his or her house owners. The transactions, it stated, resulted in onerous lease agreements that diverted funds away from direct affected person care.
Prospect’s sale of three Connecticut hospitals to Yale New Haven Well being has been tied up in court docket. CT Mirror reviews that the Prospect-owned amenities in Connecticut — Waterbury, Rockville Common, and Manchester Memorial Hospitals — have suffered financially and operationally during the last a number of years. “In August 2023, Prospect Medical Holdings was hit with a debilitating cyberattack that crippled lots of its amenities across the nation. The next month, the presidents of Prospect’s Connecticut hospitals warned the governor that the monetary state of affairs in any respect three hospitals was dire,” the Mirror famous.
The corporate burdened that the Chapter 11 proceedings don’t embody PHP Holdings and its subsidiaries, together with Prospect Well being Plan Inc., Prospect Medical Programs LLC and its affiliated medical teams in California, Arizona, and Texas, Gateway Medical Heart, and Foothill Regional Medical Heart. Their sale to Astrana Well being remains to be anticipated shut in mid-2025.
