Steward Health Care Files for Chapter 11 Bankruptcy

Dallas-based Steward Health Care has filed for Chapter 11 bankruptcy and is working on debtor-in-possession financing terms from real estate investment firm Medical Properties Trust for an initial financing of $75 million and up to an additional $225 million once certain conditions are met. .

The company said it did not expect any disruption to its daily operations during the Chapter 11 process and that its hospitals, medical centers and doctor’s offices remain open.

Steward has faced significant financial problems in Massachusetts, where it now operates eight hospitals. The company revealed a plan to sell its doctor network to Optum in a notice to the Massachusetts Health Policy Commission on March 26.

“The deal is part of Steward’s effort to climb out of a financial hole that has rocked the Massachusetts healthcare industry,” WBUR in Boston reported at the time. “Public officials and health care leaders are deeply concerned that the company could shut down medical services amid its financial problems, which could reduce patients’ access to care and destabilize the state’s health system.” .

Since January, the Commonwealth Department of Public Health has had monitors at Steward hospitals to assess whether facilities have the necessary supplies, equipment and staff to provide safe and effective care. Those monitors are still up.

On May 3, the Department of Public Health activated its Emergency Operations Plan, which includes a regionally focused Incident Command System to lead a coordinated response to clinical quality and access in eastern Massachusetts, in the context of Steward Hospitals’ financial challenges.

“This week, the Massachusetts Department of Public Health activated its Emergency Operations Plan as part of our ongoing commitment to ensuring patient safety, protecting access to care, and preserving jobs. “This next step is part of our continued response to Steward Health Care’s financial challenges,” Health and Human Services Secretary Kate Walsh said in a statement.

“In recent months we have secured bridge financing and made progress on the sale of our Stewardship Health business to help stabilize operations across all of our hospitals,” Ralph de la Torre, MD, CEO of Steward, said in a statement.

“With the delay in closing the Stewardship Health transaction, Steward was forced to seek alternative methods to unite its operations. With the additional funding in this process, we are confident that we will keep hospitals open, supplied and operational so that the care of our patients and our employees is maintained,” de la Torre added. “Working collaboratively with the stakeholders in this court – Monitored controlled environment and with the benefit of our previous strategic efforts, Steward will be better positioned to responsibly transition ownership of its Massachusetts-based hospitals, keep all of its hospitals open to treat patients, and ensure care and service of our patients and our communities.”

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