Owner pulls application to transfer Roger Williams, Fatima hospitals just before AG ruling

Business News

PROVIDENCE, R.I. (WPRI) — Rhode Island’s third-largest hospital group abruptly withdrew its application to transfer ownership of its two medical facilities Friday morning, just hours before Attorney General Peter Neronha was expected to issue a ruling on the request.

Prospect Medical Holdings threatened to close Roger Williams Medical Center and Fatima Hospital on Thursday after getting word of the conditions that Neronha planned to impose to win approval.

The California-based company, which employs roughly 2,800 people in Rhode Island, has had a majority stake in the two hospitals since 2014. The private equity group which controls Prospect, Leonard Green & Partners, is seeking to sell its ownership stake to Prospect’s CEO and his partner.

State law requires any hospital merger or change of ownership to be approved by both the attorney general’s office and the Department of Health.

For the better part of a year, Neronha said he and his team have been reviewing Prospect’s application, looking to ensure the hospitals would be able to sustain themselves if the deal were to go through.

“Make sure these hospitals can run for the next five years,” Neronha said. “I can’t stand back and say, ‘look, on a wing and a prayer, I’m going to hope for the best.’ If I do that, I am abandoning the state.”

Neronha suggested the hospital group set aside $120 million to $150 million in escrow, which Prospect called “unreasonable, unacceptable, and unprecedented” in a statement to 12 News on Thursday.

“They chose to get into health care and they should act like they believe in it,” Neronha added.

On Friday morning, Prospect asked R.I. Superior Court Judge Brian Stern to impose a temporary restraining order against Neronha to prevent him from issuing his decision now that the company has withdrawn its application, claiming his review was full of “factual inaccuracies” that could hurt the company and its employees.

Stern took up the case after meeting with the two parties, but no decision was made on Friday.

Neronha took issue with the request, saying in a statement that Prospect’s withdrawal of its application is “telling” and designed to avoid making his review public.

“It was my intention to publish our decision, whether or not it was with an application still on file or not on file,” Neronha said.

“To me, what it says is that they did not want it to be public,” he added. “My view is the public is entitled to see it.”

Neronha didn’t close the book on the dispute, saying he’s giving time to reassess and return to the table.

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