Waterbury Hospital is one of three hospitals owned by Prospect Medical Holdings. (Shahrzad Rasekh/CT Mirror)
Prospect Medical Holdings, the owner of three struggling Connecticut hospitals in Waterbury, Manchester and Vernon, filed for bankruptcy protection late Saturday night.
The California-based hospital operator, which also owns facilities in California, Pennsylvania and Rhode Island, filed for Chapter 11 in the U.S. Bankruptcy Court in Northern Texas to “proceed on a strategic pathway to realign its organizational focus outside of California,” according to a company statement.
Prospect committed to continuing “uninterrupted” patient care at their facilities throughout the bankruptcy process.
Prospect declares bankruptcy, says sale of Roger Williams and Fatima hospitals will continue
The bankruptcy filing could complicate efforts to resolve longstanding financial and operational problems at Prospect’s three Connecticut hospitals that were exacerbated by a debilitating cyberattack in August 2023. The following month, the presidents of those hospitals warned the governor that the financial situation at all three hospitals was dire.
In particular, it’s unclear what the filing will mean for the pending agreement Prospect signed in 2022 to sell its three Connecticut hospitals to Yale New Haven Health.
The statement issued by Prospect mentioned that the bankruptcy filing would help to expedite the timeframe of two pending agreements: one to sell Prospect’s two Rhode Island hospitals and another to divest from the Crozer-Chester Medical Center in Pennsylvania. However, it made no mention of the agreement with YNHH and representatives from Prospect did not respond to a request for comment Sunday.
A spokeswoman for Yale New Haven Health issued a statement Sunday saying that Prospect’s bankruptcy filing “is a national matter and of grave concern to many hospitals around the country.”
“Yale New Haven Health raised the alarm about this inevitability in the lawsuit we filed last year, recognizing Prospect’s lack of investment and mismanagement of the Connecticut Prospect hospitals,” wrote the spokeswoman, Dana Marnane. “The situation was further exacerbated by their lack of payment to the pension plans and growing debt to the state, local governments and vendors. Many of these same issues were referenced in lawsuits filed by the States of Pennsylvania and Rhode Island regarding Prospect’s mismanagement of their hospitals in those states. We will closely monitor the proceedings and determine what steps, if any, YNHHS will take as part of this process.”
Connecticut officials issued a statement Sunday saying they, too, were closely monitoring the situation.
“We have a cross-agency team in place to ensure hospital operations continue uninterrupted and that employees and vendors continue to be compensated, as required by court orders,” said Gov. Ned Lamont in the statement.