As it tries to complete terms for a loan from hospital owner Medical Properties Trust, Steward Health Care, the largest physician-led, for-profit hospital network in the United States, filed for bankruptcy on Monday morning.
Company representatives stated in a press release that Steward took the action as a necessary precaution to enable the business to keep giving its patients the care they require.
“Steward does not expect any interruptions in its day-to-day operations, which will continue in the ordinary course throughout the Chapter 11 process,” the company said in a press release Monday morning. “Steward’s hospitals, medical centers and physician’s offices are open and continuing to serve patients and the broader community and our commitment to our employees will not change.”
Over thirty hospitals are run by Dallas-based Steward throughout the states of Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania, and Texas.
On Monday, Steward said that it was completing the conditions to obtain debtor-in-possession funding from Medical Properties Trust. $75 million in initial funding and up to $225 million in further money are scheduled to be provided to the hospital, subject to certain requirements being met. First, in January, the landlord—who specializes in medical facilities—gave Steward a $60 million bridge loan.
The governor of Massachusetts, Maura Healey, announced on Monday that the state has set up a call center for anybody with inquiries and has been readying itself for a potential bankruptcy file. She stated that patients should make their appointments and that Steward hospitals will remain open in spite of the lawsuit.
Healey was especially critical of Steward’s hospital management, claiming that it was the cause of the issue.
At a press conference on Monday, Healey stated, “This situation is rooted in and stems from greed, mismanagement, and lack of transparency on the part of Steward leadership in Dallas, Texas.” “This is an unfortunate circumstance that should never have occurred, and we will be collaborating to take action to ensure that it doesn’t happen again.”
“Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment. Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees, and communities at this time,” Dr. Ralph de la Torre, CEO of Steward said in a press release.
CEO of Steward Health, Dr. Ralph de la Torre, stated on Monday that one of the reasons the company had to declare for bankruptcy was because the sale of its physician group, Stewardship Health, to Optum, was delayed.
According to De la Torre, “Steward was forced to seek alternative methods of bridging its operations due to the delay in closing the Stewardship Health transaction.” “We are confident that we will keep hospitals open, stocked, and running with the additional financing in this process so that our care for our patients and our employees is maintained.”
In addition, he listed “continuing impacts of the Covid-19 pandemic” and inadequate Medicare and Medicaid reimbursement as justifications for the case.