Los Angeles-based Prospect Medical Holdings has received approval from Rhode Island Director of Health Jerry Larkin, MD, to sell two of its state hospitals to The Centurion Foundation, an Atlanta-based nonprofit.
Here are seven things to know:
1. The two hospitals, Our Lady of Fatima Hospital in North Providence, R.I., and Roger Williams Medical Center in Providence, are owned and operated by Prospect's Providence-based CharterCare Health Partners.
2. Dr. Larkin's decision comes after recommendations from the Rhode Island Health Services Council and completes all state-level regulatory approvals needed for the transaction, according to a Nov. 25 news release.
3. Prospect received approval to sell the hospitals from Rhode Island Attorney General Peter Neronha in late June after a review. Mr. Neronha then filed a mid-July motion for Prospect to be held in contempt for refusing to comply with a court order to pay $17 million in unpaid bills to hospital vendors. He later canceled the motion due to Prospect's compliance.
4. Prospect has been working to sell 10 of its 16 hospitals amid an ongoing investigation by the Justice Department and financial challenges.
5. Conditions for the sale of the two hospitals include providing demographics and financial data to the state, maintaining national accreditation, creating charity care referral plans, and submitting regular written reports to the Rhode Island Department of Health.
6. Under the RIDOH's Hospital Conversions Act decision, Centurion must also retain independent board members who have diverse expertise and uphold financial obligations for the hospital and hire a chief restructuring officer to oversee financial management, explore strategic alternatives and manage business affairs at the hospital. Prospect must address its outstanding debts and fund needed hospital repairs before the sale can conclude under the act as well.
7. "In light of the historical and ongoing financial and operational challenges at the hospitals, RIDOH's Change in Effective Control decision and our Hospital Conversions Act decision came with conditions carefully developed to restore local control, help stabilize these two facilities, and help ensure that the new operators would be positioned to provide consistent, safe, high-quality care," Dr. Larkin said in the release.
Becker's has reached out to Prospect and will update this story should more information become available.