State considers all contingencies as bankruptcy threat looms for Steward

The future of the Steward Health Care hospitals currently operating in Massachusetts may be in doubt and bankruptcy a real possibility under discussion among health officials, but the state is ready for even that dire circumstance and working to prevent similar problems from occurring in the future, according to officials.

State monitors have been in place in the Dallas-based company’s Bay State hospitals since January, after it was revealed the health care provider is apparently behind on its debts enough to find itself embroiled in several lawsuits from suppliers and the owners of the land on which the hospitals sit.

This weekend, House Speaker Ron Mariano said a hospital oversight bill under consideration in the lower chamber would require hospital owners to open their books to lawmakers, ensuring a level of transparency that Steward has apparently refused.

“We’re going to try and make sure that we close all of the loopholes that Steward was able to take advantage of,” Mariano told WBZ’s Jon Keller.

Part of what got Steward into the mess they are, according to Mariano, is the fact they were allowed to sell the land underneath their hospital buildings. Since then, they’ve allegedly missed tens of million in rent payments to their new landlords, Medical Properties Trust. This sell-and-lease model would be prevented by the House’s bill, according to the speaker.

Another problem, Mariano said, is the fact they’ve apparently never complied with state rules requiring them to disclose financial information to the state. The Quincy Democrat said the state won a court battle over the rule, but that the appeals process has dragged on since. The House bill, he said, would make that requirement more concrete.

“We’re going to insist that hospitals open up their books, whether they are a private company or a not-for-profit,” the speaker said.

“We’ve really never looked into how the money at Steward was spent, and that’s a real problem,” he said.

Last week, Gov. Maura Healey’s administration launched an “emergency operations plan” aimed at dealing with whatever fallout may come from Steward’s dire financial circumstances and the potential for disruption to patient care at any of the company’s eight operational Bay State hospitals.

Executive Office of Health and Human Services Kate Walsh said the decision was part of the state’s “continued response to Steward Health Care’s financial challenges.”

Part of that preparation is for bankruptcy, Walsh said previously.

“Every day at 7:30, we have a stand-up call with leaders across government, external counsel, people across the health care system, other colleagues in other parts of government, to discuss what we know, what we’ve learned and how we’re going to proceed,” Walsh told the Senate Post Audit and Oversight Committee late last month. “We also have expert advisors to guide us with respect to a national bankruptcy if that were to occur.”

With last week’s establishment of the emergency response center, officials have placed the state at the ready react to developments with Steward as they occur.

“As part of Emergency Operations activation, the Department has formalized an Incident Command System to coordinate the regional planning work already underway. The Incident Command System incorporates the ongoing external monitoring in all Steward hospitals, enables DPH to rapidly respond to any clinical needs or issues that arise, and fosters increased communication with other regional health care organizations, first responders and community leaders,” DPH Commissioner Dr. Robert Goldstein said with the announcement.

A spokesman for the EOHHS, when asked if the state was ready to respond to a possible Steward bankruptcy, would not elaborate, instead telling the Herald the state is working on a number of contingency plans to respond should Steward’s financial circumstances grow worse.

The Incident Command will be led by Gregg Meyer, MD, who has spent decades as an executive at Mass General Brigham, MGH/MGPO, and Dartmouth Health. A practicing primary care physician, Meyer has worked in the federal government under two administrations. He has extensive experience in hospital operations and crisis management.

“This is the next step, and the responsible step in terms of making sure that we are prepared to do what we need to do when it comes to ensuring that patients have access to care, and that the health care market is stable,” Healey told reporters on Friday.

Steward facilities include Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Holyoke Hospitals in Haverhill and Methuen, Morton Hospital in Taunton, Nashoba Valley Medical Center in Ayer, Saint Anne’s Hospital in Fall River, and St. Elizabeth’s Medical Center in Brighton. Their Norwood Hospital closed in 2020 due to flooding, and the company recently closed New England Sinai Hospital.

A spokesperson for Steward did not return a request for comment by press time.

Holy Family Hospital in Methuen is one of nine hospitals in the state run by Steward Health Care, a company that Gov. Maura Healey has said should sell its operations and get out of Massachusetts. (Stuart Cahill/Boston Herald, file)

 

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