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 mentioned it plans to give attention to its operations in California and to promote the Roger Williams Medical Middle and Our Girl of Fatima Medical Middle in Rhode Island and proceed working with the Commonwealth of Pennsylvania to agree on phrases for the divestiture of the Crozer-Chester Medical Middle.
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 major cyberattack and elevated denials from well being plans” because the impetus behind its resolution.
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 lately as Prospect slashed companies and wards inside Crozer.” WHYY mentioned the chapter possible places a pause on the Pennsylvania Workplace of Legal professional Normal’s swimsuit, 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 yr after the chapter of Steward Well being Care, one other main hospital system as soon as backed by personal fairness. Together with Steward, Prospect Medical has been one focus of a CBS Information investigation revealing how personal fairness traders have siphoned a whole lot of thousands and thousands of {dollars} from neighborhood hospitals. CBS Information mentioned 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 massive payouts for his or her homeowners. The transactions, it mentioned, 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 Normal, 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 a lot 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 pressured that the Chapter 11 proceedings don’t embody PHP Holdings and its subsidiaries, together with Prospect Well being Plan Inc., Prospect Medical Techniques LLC and its affiliated medical teams in California, Arizona, and Texas, Gateway Medical Middle, and Foothill Regional Medical Middle. Their sale to Astrana Well being remains to be anticipated shut in mid-2025.