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 deal with 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 experiences that in an e-mail despatched to Crozer workers, 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 experiences that state officers and native legislators “have sparred with hospital administration lately as Prospect slashed providers and wards inside Crozer.” WHYY mentioned the chapter seemingly places a pause on the Pennsylvania Workplace of Legal professional Basic’s go well with, filed in October towards 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 a whole bunch of hundreds of 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 giant payouts for his or her house owners. 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 courtroom. CT Mirror experiences that the Prospect-owned amenities in Connecticut — Waterbury, Rockville Basic, 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 harassed 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 Middle, and Foothill Regional Medical Middle. Their sale to Astrana Well being continues to be anticipated shut in mid-2025.