Prospect Threatens To Close Fatima Hospital In North Providence

NORTH PROVIDENCE, RI — The Los Angeles-based Prospect Medical Holdings today informed Attorney General Peter Neronha and the R.I. Department of Health that financial conditions linked to its application under the Hospital Conversions Act could force it to close Roger Williams Medical Center and Our Lady of Fatima.

Prospect objects to a requirement by Neronha that they put $120 million to $150 million in escrow to ensure the financial viability of the hospitals located in Providence and North Providence.

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"The imposition of such an escrow is unreasonable, unacceptable, and unprecedented," Fisher wrote in a statement. "The demand for such an escrow as a condition to continue to do business in RI would leave Prospect with very little choice but to initiate a wind-down of its RI operations. Everyone involved in this transaction needs to understand that there are dire consequences for Rhode Island’s 3rd largest hospital system if this transaction is not approved.”

According to The Boston Globe, Prospect is the parent company of CharterCARE in Rhode Island, and they own a controlling stake in the hospitals located in Providence and North Providence. Prospect is controlled by a private equity firm that needs state approval to sell its ownership of Prospect. Both the state health department and the attorney general’s office must approve the transaction.

GoLocal Providence reports that 2,800 jobs are at stake. The entity pays the City of Providence $2.8 million in taxes and North Providence $875,000.

Prospect has yearly revenues in the amount of $2.7B and says it is well-capitalized with adequate liquidity. Prospect believes the proposed escrow is unlawful.

Read more at The Boston Globe and GoLocal Providence