Massachusetts Governor Says Steward Health Care Must Give 120 Days’ Notice Before Closing Hospitals

BOSTON– Gov. Maura Healey said Thursday she is pushing Steward Health Care to adhere to a state Department of Public Health regulation that says hospital owners must give 120 days’ notice before any medical facility can close in Massachusetts. .

Healey made the comment a day after a bankruptcy judge allowed Steward’s decision to close two Massachusetts hospitals. Steward announced on July 26 its plan to close the hospitals – Carney Hospital and Nashoba Valley Medical Center – around Aug. 31 because it did not receive qualified bids for either facility.

The Dallas-based company — which announced its bankruptcy on May 6 and two days later said it planned sell the 30 hospitals it operates across the country – said it has received qualified proposals for six other hospitals it operates in Massachusetts.

“I was clear with Steward, they need to stay open for 120 days. We need a smooth transition. Steward made the decision to close these two hospitals,” Healey told reporters. “We have been working hard to secure an agreement that ensures a smooth transition of ownership from Steward to a responsible operator.”

Asked whether it is possible to require hospitals to remain open for 120 days, Healey said “yes, yes, yes”.

“And creditors need to terminate leases. We have to cancel the lease contracts. It’s ridiculous that we’re in this situation because of the greed of Steward and (Steward CEO) Ralph de la Torre,” she said.

A spokesperson for Steward did not immediately respond to a request for comment.

Healey was referring to rent payments Steward owed after selling its hospitals’ physical properties — including land and buildings — to another company. Both Steward and the state argued that requiring potential buyers to shoulder those payments rather than negotiating their own leases — or purchasing the hospital properties outright — was making it difficult to transfer ownership of the hospitals.

Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston approved a motion by Steward on Wednesday to reject the master lease binding the Massachusetts hospitals.

In a letter to Steward dated Tuesday, U.S. Senators Edward Markey and Elizabeth Warren and other members of the state’s all-Democratic congressional delegation also pointed to state regulation that requires a hospital to formally notify the state of its intention to close your services for 120 days. before the proposed closing date, giving state health officials time to hold public hearings.

“Steward’s financial crisis does not exempt the company from following the law, nor does it exempt Steward and its corporate enablers from their moral obligations to the public,” the lawmakers wrote.

Massachusetts also agreed to provide around US$30 million to help support the operations of six hospitals that Steward Health Care is trying to transfer to new owners.

The payments are advances on Medicaid funds the state owes the Steward and are being provided contingent on an orderly move toward new ownership. The $30 million is also contingent on the achievement of Steward targets and cannot be used for rent payments, debt service or management fees.

The company’s hospitals are spread across eight states.

A Senate committee voted last week to authorize an investigation in Steward’s bankruptcy and in la Torre’s subpoena. The subpoena would force de la Torre to testify before the Senate Health, Education, Labor and Pensions Committee at a September 12 hearing.