Boston-based Steward Health Care System has refused to submit its consolidated financial statement for 2013 to state regulators, which led the state to impose a fine of $1,000 per week that now totals $12,000.
For-profit Steward, founded in 2010 and owned by private equity firm Cerberus Capital Management, does provide the state with financial information for its individual hospitals, according to a Commonwealth report. As a for-profit system, it has provided consolidated financial statements twice in the past, but refused to do so for 2013.
The system claims it should not be required to submit the statement because the document includes information about non-hospital businesses that are not covered by state regulation. Brooke Thurston, a Steward spokesperson, said the statement contains "confidential information that as a private, investor-owned, tax-paying entity is not relevant," according to the report.
State officials beg to differ. In late November, after months of unsuccessful negotiations, the state sent Steward an invoice for $5,000 in fines. The $1,000-per-week fine imposed currently totals $12,000, according to the report.
The fines coincide with Steward's attempt to close 196-bed Quincy (Mass.) Medical Center. Steward says Quincy has continued to lose money and its patient volume has declined since it bought the hospital out of bankruptcy three years ago.
The closure would violate a pledge Steward made to Massachusetts Attorney General Martha Coakley upon its purchase of Quincy: to keep the hospital open for at least 10 years or 6.5 years if financial performance was poor. Steward also vowed at that time to provide at least 18 months' notice before closing the hospital.
Steward provided less than 60 days' notice when it announced in November plans to close Quincy by the end of 2014. The closure was recently delayed until February 2015.
After Quincy officials threatened legal action, Steward also announced it would keep the emergency department open as a satellite facility. The ED license will be transferred to Steward's Carney Hospital in Dorchester, Mass. Steward also pledged at a public hearing to offer healthcare in Quincy through a new 24-hour urgent care center and two other clinics.