WOONSOCKET – It was a big two weeks for Attorney General Peter Neronha. On Thursday, June 20, the Attorney General and his legal team announced the regulatory decision his office had arrived at under the Hospital Conversions Act regarding the bid by the Centurion Foundation, a nonprofit based in Atlanta, Georgia, to buy Roger Williams Medical Center and Our Lady of Fatima hospitals, the distressed financial hospitals owned by Prospect Medical Holdings.

The decision created a series of 40 conditions that the Centurion Foundation and private-equity firm Prospect Medical Holdings had to meet in order to consummate the sale.

A week earlier, RI Superior Court Judge Brian Stern ruled that Prospect had to pay $17 million to cover unpaid medical bills within 10 days of his decision, a major victory for Attorney General Neronha and his legal team. [See link below to ConvegenceRI story, “Will the health system crash and burn?”]

“The self-evident truth is that private equity does not belong in health care,” Attorney General Neronha said, in the news release announcing the decision. “Such firms don’t care about patients or providers. They only care about profits. That is why this Office made the previous sale of these hospitals in 2021 contingent on Prospect and Leonard Green putting $80 million into escrow to ensure the hospitals’ continued operations. Since then, despite their rosy promises, Mr. Lee and Mr. Topper have continued to be exceedingly poor stewards for these hospitals. This decision ensures that Prospect continues to be bound by the robust conditions of our previous decision until the transaction is finalized, and ensures that Prospect cannot walk away from these hospitals until they have met their baseline obligations.”

Altogether, the Attorney General’s decision imposed 40 unique conditions across seven areas, with the following conditions highlighted as particularly critical to ensure the viability of the system and its hospitals. The conditions included:

•    To address the currently precarious status quo and to address the application’s failure to present an adequate level of funding for the hospitals to meet their operating and capital needs.
•    Prospect must cure all of the life safety and physical plant violations cited by state and federal regulators, including but not limited to, repair of the roof and inadequate life safety equipment.
•     Prospect must come into compliance with the 2021 Decision, including ensuring payment of outstanding accounts payable owed to vendors of the Rhode Island Hospital.
•    Prospect and Centurion must commit to guarantee $80 million in cash financing to add to the books of the New CharterCARE System, regardless of any failure to secure that amount through the bond transaction.
•    To address the application’s lack of a credible plan to turn CharterCARE System’s long history of operating losses into New CharterCARE System’s ongoing state of sustainable operations, Prospect and Centurion must fund a turnaround consultant to be approved by the Attorney General. 
•    To address the application’s reliance on future, contingent events like IRS approval of non-profit status for any chance of success, conditions specifically mandating the timing, level of effort, and manner in which these steps must be completed.
•    To ensure that the community’s needs are adequately served, New CharterCARE System must adhere to industry standards for charity care and adequately fund identified community health needs.
• To ensure continuity of quality care, the New CharterCARE System must notify the Attorney General of any reductions in workforce that meet a certain threshold, and must maintain the current level of employee benefits during the initial period following the closing of the Proposed Transaction.

Attorney General Neronha then explained the importance of the conditions, beyond the numbers, figures, and provisions that make up a transaction, with a focus on the communities, patients, and providers that these hospitals serve and employ.

“Our conditions aim to ensure that these hospitals continue to deliver quality, accessible, and affordable health care, gainfully employ thousands of Rhode Islanders, and successfully operate long into the future,” Attorney General Neronha said, in the news release.

The calculations    
ConvergenceRI asked Brian Hodge, the Attorney General’s communications spokesperson, to confirm the numbers contained in the decision. “Just to double check my calculations, Centurion and Prospect are responsible for an additional $66.8 million in funds to secure the transaction, of which roughly $47 million may come from the existing escrow account, so that some $20 million must be invested by Prospect and Centurion into the new account, but cannot be used to pay for executive compensation fees or management fees for Centurion Foundation, which, as I recall, had only one full-time employee.”

“That’s correct,” Hodge responded.

Advocacy in action    
Still, the Attorney General made time to attend the annual meeting of the Community Care Alliance on Tuesday, June 18, which had chosen to honor Richard Asinof with its “Advocacy in Action” award.

As Attorney General Neronha posted on X, “Today, AG Neronha attended @CCare_RI’s Annual Meeting to see @RichardAsinof accept the “Advocacy in Action Award” for his commitment to advocacy and honesty in journalism. Here’s to you, Richard!”

The Community Care Alliance annual meeting held June 18 was a time of celebration, recognizing the hard work of the community agency’s staff and volunteers in achieving its vision: “We support individuals and families of all cultural backgrounds in their efforts to meet economic, social and emotional challenges and enhance their well-being.”

The community agency’s vision represents a commitment to collaboration and inclusiveness: ‘Through programs, advocacy and collaboration, people are empowered to discover their potential and live as engaged citizens, free of stigma, within a thriving, diverse, inclusive community.

The annual meeting’s keynote speaker was Tanja Kubas-Meyer, the director of the R.I. Coalition for Children and Families.

The honorees included:

•    The 2024 Paul Dempster Award was presented to Felice Desmarais, who, after her retirement in 2007,  served for 17 years as a volunteer on the board of directors of the HUD Borrowers Corporation, which manages nonprofit corporations that own and operate apartment buildings specifically designed  to accommodate elderly and individuals with severe and persistent mental illness.
•   The 2024 Ubuntu Award, was presented to Donna Vear Hamilton, who has worked at the Community Care Alliance for more than 20 years, exemplifying the concept of Ubuntu, which roughly translated means, “I am because of you.”
•      Richard Asinof, founder, editor and publisher of ConvergenceRI. As described in the program, Asinof’s advocacy included “telling our story at 181 Cumberland Street when we suffered the loss of a building we had occupied for 40 years due to negligence by the State of Rhode Island. It was through Richard’s expert journalism that we were able to bring attention to our situation. His detailed, in-depth articles connected the dots and illuminated  issues that matter, educating Rhode Islanders and giving voice to organizations expressing concerns for neglected and marginalized people.”