Prospect Medical Holdings, the parent company of Rhode Island’s Roger Williams Medical Center and Our Lady of Fatima Hospital, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas.
The move, announced late Friday, comes as Prospect faces mounting debts, including $17 million owed to vendors, and ongoing struggles to finalize the sale of its Rhode Island hospitals to Georgia-based Centurion Foundation.
In a statement on its website, the company said the filing aims to “effectuate the paths forward and ensure continued provision of critical and tailored healthcare.” Despite the financial shake-up, Prospect claims its hospitals, medical centers, and physician practices will remain operational during the bankruptcy process.
Otis Brown, a spokesperson for CharterCARE, which directly operates the two Rhode Island hospitals, sought to calm concerns, stating the bankruptcy “has no immediate impact on the operations of CharterCARE Health Partners.” Brown assured Rhode Islanders that “our hospitals, programs, and physician practices are fully operational, busy, and actively treating patients, from emergency services to cancer care.”
Rhode Island Leadership Reacts
Rhode Island Attorney General Peter Neronha, whose office has closely monitored Prospect’s operations, stressed the importance of stability amid the crisis.
“This morning, my office was advised of Prospect’s bankruptcy filing,” Neronha said in a statement. “While the word ‘bankruptcy’ can be frightening, this development has been anticipated. We are ready to represent the interests of Rhode Islanders to ensure these hospitals continue delivering high-quality healthcare.”
Neronha has been a vocal critic of private equity ownership, attributing many of the healthcare system’s woes to what he calls “inherently destructive” practices.
“This is personal,” he added. “It’s time to leave behind the dark days of private equity and move toward a sustainable future for our safety-net hospitals.”
U.S. Senator Sheldon Whitehouse echoed the sentiment, blasting private equity’s role in destabilizing healthcare.
“Bad outcomes for patients and providers are par for the course when private equity firms take over hospitals,” Whitehouse said. “The positive news is that the conversion process for these local hospitals was already well underway, minimizing disruption to Rhode Island’s healthcare system.”
Sale to Centurion Foundation in Limbo
The bankruptcy filing casts uncertainty over Prospect’s pending sale of Roger Williams and Fatima to Centurion Foundation. While Prospect has pledged to proceed with the transaction, no deal has been finalized.
State leaders remain hopeful that new ownership will stabilize operations. However, the path forward is fraught with challenges, with bankruptcy proceedings adding another layer of complexity.
For now, Rhode Islanders are left grappling with the uncertain future of two critical healthcare institutions. Despite reassurances from Prospect and CharterCARE, many worry about what lies ahead for patient care and hospital staff.
As Attorney General Neronha vowed: “We will see this through here in Rhode Island and in the courtroom in Texas.”