Delivery of Care

‘Let them eat invoices’

Attorney General Peter Neronha emerges as a courageous prosecutor willing to take on the forces of private equity to protect the public health in Rhode Island

Photo by Richard Asinof/File Photo

R.I. Attorney General Peter Neronha talks at length in his office about the health care choices facing Rhode Island during a one-on-one interview with ConvergenceRI/.

By Richard Asinof
Posted 8/19/24
The resolution of the bankruptcy of Steward Health Care’s hospitals and physician networks promises to be a long goodbye, with R.I. Attorney General Peter Neronha playing a key role in reviewing the finances involved in Brown Medicine’s purchase of two bankrupt hospitals in Taunton and Fall River.
How strong is the current financial situation at South County Health, which is apparently struggling to hold onto a number of its physicians? Will the state of Rhode Island consider taking over the properties of Roger Williams Medical Center and Our Lady of Fatima Hospitals by eminent domain and creating a new model of care delivery, similar to what has been done with Boston Medical Center? Was the threat of Federal Trade Commission oversight into the proposed sale of Steward Health Care’s physician groups to Optum, the for-profit arm of UnitedHealthcare, the reason why that deal did not go through as planned?
The joint lawsuit being pursued by R.I. Attorney General Peter Neronha and the private attorneys hired by Gov. Dan McKee, Max Wistow and Jonathan Savage, brings to mind the unfinished legal story of what happened with 38 Studios. There was the infamous email sent out by a communications staffer for Gov. Carcieri, which said: “In Schilling, we trust.” It turned out to be more than just a bad bet.
There were also the shenanigans being played out at the top levels of the state’s economic development agency concerning the lack of financial scrutiny undertaken by the state’s economic development agency concerning the Schilling proposal, which were easily discovered by Max Wistow’s investigations into what had happened.
There was also the fact that in Massachusetts, Schilling’s proposal for 38 Studios had been soundly rejected by those responsible for making state investments in the innovation economy. No one in Rhode Island, it seemed, had managed to do the due diligence about why 38 Studios had been so soundly rejected by the Massachusetts economic development folks.

PART One

PROVIDENCE – The headline for this story is borrowed from reporter Maureen ‘Moe” Tkacik, writing in The American Prospect, who connected the dots between the bankruptcy of Steward Health Care and the visit to Versailles by the firm’s president and CEO, Dr. Ralph de la Torre, so he could watch the 2024 Olympics. [See link to story below.]

Perhaps no imagery has captured the alleged “grifting” behavior of Steward Health Care during its descent into Chapter 11 bankruptcy than this: as the federal bankruptcy court in Houston, Texas, is busy slicing and dicing the former properties of Steward Health Care, selling off the hospitals and physician practices owned by Steward Health Care and dismantling the real estate leases for those properties controlled by Medical Properties Trust, Maquarie Infrastructure Partners and mortgage lender Apollo Global Management, Dr. de la Torre was reported by Tkacik to be partaking his role as a wealthy spectator of the 2024 Olympics, watching the games from the palatial splendor of Versailles. To quote the indefatigable radio news anchor, WPRO’s Steve Klamkin, “Really?”

The latest news from Boston, delivered at a news conference held on Friday, Aug. 16, by Mass. Gov. Maura Healey, revealed that the Commonwealth has finally stepped up to the plate and made its wishes known: six of the eight Steward Health Care bankrupt hospital properties have been acquired.

Gov. Healey announced that the state was seizing control of the real estate housing St. Elizabeth’s Medical Center in Brighton by eminent domain and turning the hospital operations over to Boston Medical Center. Boston Medical Center will also take control of Good Samaritan Medical Center in Brockton. Lawrence General Hospital will absorb the Methuen and Haverhill campuses of Holy Family Hospital, as reported by The Boston Globe

The sale of two other bankrupt hospital properties, St. Anne’s Hospital in Fall River, Mass., and Morton Hospital in Taunton, once approved by federal bankruptcy judge, means that Lifespan, Rhode Island’s largest health care delivery system, now transitioning to its new brand, “Brown Medicine,” will be acquiring the two bankrupt hospital properties, secured with investments of tens of millions of dollars by the Commonwealth of Massachusetts.

As such, this transaction now falls under the legal auspices of R.I. Attorney General Peter Neronha, under the state’s Hospital Conversions Act, a point that Attorney General Neronha made perfectly clear in a tweet on the platform formerly known as Twitter: “Mass. is pouring hundreds of millions of taxpayer money to seize and shore up community hospitals and two are still closing. Lifespan wants Mass. failing hospitals but not RI ones,” in response to The Boston Globe story, “ ‘Good riddance and goodbye.’ Healey announces deal to move six Steward hospitals to new owners.”

“Today, I’m pleased to say we’re closing the book on Steward once and for all in Massachusetts,” Gov. Healey said. “Good riddance and goodbye.”

Two other bankrupt Steward Health Care hospitals – Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer – are still in limbo, slated to close by Aug. 31 after Steward had claimed that they had failed to attract qualified bids.

Attorney General Neronha added a postscript to his initial posting: “We can stave this off in RI temporarily because of my office’s foresight re Roger Williams/Fatima three years ago. But the day of reckoning is coming. Maybe a few less ribbon cuttings and study groups and a bit more hard work fixing health care. Yeah, it’s frustrating to watch.”

As the details of the financial deal are revealed in the coming weeks, it promises to become what crime noir author Raymond Chandler once named one of his novels, “The Long Goodbye.”

Back to the future.  
When Lifespan and Brown University held what could generously be called a “big splash” on June 20, 2024, to announce the takeover of Lifespan by Brown University, it was the question that would have been asked by ConvergenceRI if he had been invited to attend the news conference. “What sources of capital does Lifespan intend on using to purchase bankrupt hospitals in Massachusetts being sold off by Seward Health Care?” [See link below to ConvergenceRI story, “Brown and Lifespan: ‘We belong together.’”]

The problem, of course, is that no one else in Rhode Island’s new media – including the top political reporters WPRI’s Ted Nesi and The Public Radio’s Ian Donnis – had managed to connect the dots, until the transaction was already a fait accompli, or a “fate accomplished.”

In their weekend political columns, both Donnis and Nesi began to ask the questions about the pending Brown Medicine transaction: how will the acquisition of bankrupt hospital systems in Taunton, Mass., and Fall River, Mass., improve the bottom line for Brown Medicine?  given the payer mix of patients at both facilities being highly dependent upon federal insurance programs, Medicare and Medicaid, said to be in the 70 percent range. “The payer mix in FallRiver/Taunton is not without challenge,” Donnis posted.

Nesi appeared to repeat the shibboleths about how Massachusetts has been receiving a higher rate of reimbursement, and somehow Brown Medicine hoped to capture those increased revenue streams as a result. “It’s easy to see why a cross-order expansion is appealing to Lifespan execs – payment rates are better in Massachusetts, and there is plenty of political support on Beacon Hill right now for helping the Steward hospitals’ new operators succeed. …Still, Fall River and Taunton aren’t Cambridge; the insurance payer mix will be challenging there, too.”

But the most recent data analyses, conducted by Manatt at the behest of The Rhode Island Foundation, appeared to tell a different story, featuring an in-depth interview with Cory King [See link below to ConvergenceRI story, “What it means to be a barometer of truth,”]

Now that the R.I. Attorney General and his excellent legal team will be involved in reviewing the calculations and analyzing the investments, it promises that there will be the kind of transparency that Steward Health Care has managed to avoid in how the money collected from all those invoices has been spent. It may not be a pretty picture, for sure, but then accountability is always a complicated landscape when it comes to health care.

And, Attorney General Neronha is perhaps correct in his estimation that Rhode Island may want to make sure that its financial seat belts are firmly fastened for the health care crisis and financial crash that awaits us all.

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