Alternative buyers threaten hospital sale

On Nov. 14 Mingle sent another letter to state regulators proposing that they reduce the purchase price from $165 million to $116 million.

In a statement to the Globe, Mingle said Centurion remains focused on its financing strategy to “close this sale as quickly as possible.”

“Our partners, including Bank of America and Rhode Island Health and Educational Building Corporation, have been equally committed to this plan and we are moving quickly to execute,” said Mingle.

The letter comes at a critical moment for Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence, two safety-net hospitals that care for many of the state’s most vulnerable, including the uninsured and many who are covered by public insurance. Prospect Medical Holdings, the owner of the hospitals, asked a bankruptcy judge permission in late October to close the hospitals unless a buyer materializes.

If the hospitals close, it would be catastrophic for anyone seeking care in Rhode Island, local health leaders say. Emergency departments will be overrun, and other systems spread thin.

The Centurion Foundation, based in Georgia, remains the lone bidder with regulatory approval, but has struggled to secure financing for months. The delay has created an opening for Prime Healthcare, the country’s fifth largest for-profit health care chain. It was state officials who initially reached out to Prime executives as an alternative solution for the hospitals, but it’s unclear when that outreach took place.

Attorney General Peter F. Neronha wrote Mingle on Nov. 10, and said the state was “surprised by your letter and its demands.”

In multiple instances, Centurion and its attorneys “recognized that you do not have financing or a definitive timeline to get to a transaction closing,” wrote Neronha. Centurion also previously expressed that it appreciates “the state has an imperative to push forward to a transaction that keeps the hospitals open for the benefit of its residents under current circumstances.”

“The current circumstances require that alternatives be explored,” Neronha wrote.

Prime executives and representatives from both Neronha’s office and the Health Department met over a potential deal on Thursday, according to Neronha spokesman Tim Rondeau.

Centurion was approved to purchase the hospitals more than a year ago with 40 strict conditions. Based in Georgia, the nonprofit has no endowment, has never owned a hospital, and has struggled to secure the $165 million in bond financing once expected in May. If the deal closes, both hospitals will convert from for-profit to nonprofit. On Nov. 14, Centurion wrote to state regulators proposing a $116 million purchase price.

Prime Healthcare — the fifth-largest for-profit health care system in the country — has suddenly shown interest in the hospitals, but is a for-profit entity like Prospect and Steward Health Care, which wreaked havoc in Massachusetts. Prime also has connections to state Health and Human Services Secretary Richard Charest. At issue is Charest’s decision to reach out to Prime sometime in the last year to gauge the company’s interest. Charest’s involvement has raised questions about the state’s neutrality in the process.

Noel True, a spokeswoman for Prime, said the organization’s nonprofit arm, Prime Healthcare Foundation, is exploring opportunities with Prospect’s Rhode Island hospitals, but is in the “early stages of reviewing the situation.”

“Given the urgent challenges these hospitals are facing, we are rapidly evaluating potential opportunities to help ensure quality care continues in Rhode Island,” True said.

Since 2022, Prospect has shuttered hospitals, cut services, and faced lawsuits in Pennsylvania and Connecticut, accusing it of “corporate looting” and endangering patients. In Pennsylvania, several of Prospect’s hospitals have closed.

Prospect is due back in court over its Rhode Island-based hospitals on Tuesday. Attorneys are expected to update the court on a plan to keep the hospitals open.

Alexa Gagosz can be reached at [email protected]. Follow her @alexagagosz and on Instagram @AlexaGagosz.