R.I. health care leaders urge federal bankruptcy judge to expedite sale of Roger Williams, Fatima

A total of 2,500 employees work at Prospect Medical’s two Rhode Island hospitals, including Roger Williams Medical Center in Providence.
(Photo by Michael Salerno/Rhode Island Current)

An assortment of Rhode Island’s hospital leaders banded together Wednesday in pleading for a federal bankruptcy judge to expedite approval of the sale of Roger Williams Medical Center and Our Lady of Fatima Hospital to The Centurion Foundation.

“As a matter of public health and safety, we respectfully request that you look favorably and act expeditiously on the petition to approve the private sale of CharterCARE Health Partners to The Centurion Foundation,” the nine signatories wrote in their letter to Chief Judge Stacey G. C. Jernigan of the Northern District of Texas Bankruptcy Court. The letter was written Wednesday but released publicly Friday. 

 CharterCARE Health Partners is a subsidiary of Prospect Medical Holdings, a California-based hospital chain company that filed for Chapter 11 bankruptcy on Jan 11. 

Days after the bankruptcy announcement, Rhode Island Current reported that Prospect owes more than $1 billion to over 100,000 creditors, but its available cash totals only $3.4 million. The 12,500 Prospect hospital employees across the country, including the 2,500 in Rhode Island, were able to get their next paychecks after the court authorized a $100 million line of credit.

A request from Prospect for short-term financing heads back to Dallas federal bankruptcy court on Feb. 12 for a second hearing.

“As you may know, this sale has undergone a comprehensive review by the designated RI regulatory authorities under the state’s Hospital Conversion Act application, one of the most stringent laws governing such transactions in the country,” the letter reads. “Centurion has received the requisite approvals from both governing bodies, including significant terms and conditions to guide the future of these hospitals.” 

“In other words, this has been fully vetted and agreed to with more than ample safeguards.” 

The letter’s signees include: 

• Howard M. Dulude, interim president of the Hospital Association of Rhode Island
• Elena Nicolela, president and CEO of Rhode Island Health Center Association
• Stacey Paterno, executive vice president of the Rhode Island Medical Society
• John Fernandez, president and chief executive officer of Brown University Health (formerly Lifespan)
• Carrie Kenyon, executive director of ancillary and support services at Lawrence + Memorial Hospital and Westerly Hospital
• Mary Marran, Hospital Association of Rhode Island chair and president and chief operating officer at Butler Hospital 
• Aaron Robinson, Hospital Association of Rhode Island vice chair, and president and chief executive officer South County Health
• Michael Souza, Chief Executive Officer, Landmark Medical Center
• Dr. Michael Wagner, president and chief executive officer of Care New England

Court filings reveal that both Prospect and Centurion plan to move forward with the deal, relying on a federal bankruptcy code provision permitting private sales of certain assets. The letter argued for the importance of approving the sale in the context of Rhode Island’s sparse landscape for health care options.

Roger Williams in Providence and Fatima in North Providence together have more than 400 hospital beds, with 104 of them designated for behavioral health patients. That represents more than 20% of behavioral health beds available statewide.

The long-awaited $80 million sale was supposed to close this month, after a yearslong process to secure a new owner for the struggling safety net hospitals. Both the Rhode Island Office of the Attorney General and Rhode Island Department of Health OK’d the sale in June 2024, contingent upon meeting 80 conditions. 

“The existing area hospitals, health centers, and physician practices, are simply in no position to absorb the loss of the CharterCARE facilities, their critical services, employees, and affiliated physicians,” the letter noted. “Perhaps most importantly, Centurion will be returning CharterCARE to not for profit status, separating it from its private ownership and equity strings, and reinstituting local management and control.”

Friday’s letter echoed what Dr. Jerry Larkin, the director of Rhode Island’s health department, has said in court documents.

“The closure of these RI safety net hospitals would overwhelm RI’s healthcare system and create significant barriers to care for individuals already facing profound health disparities,” Larkin wrote in a pre-filed testimony to the bankruptcy court.