State regulators release documents on proposed sale of Roger Williams, Fatima hospitals

The proposal to transfer ownership of Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence to a Georgia nonprofit was made public Monday afternoon by the two state regulators overseeing hospital conversions in Rhode Island.

State can finally start formal review process for Fatima and Roger Williams hospital acquisition

The application by Atlanta-based Centurion Foundation Inc. and private equity company Prospect Medical Holdings Inc. can be downloaded from the websites of the Rhode Island Department of Health and the Office of Attorney General. Numerous pages of appendices and exhibits with commercial information deemed confidential have been redacted.

The purchase price for Centurion to acquire the two hospitals plus affiliated physician groups, home care and hospice agencies and offices operated by Prospect Medical subsidiary CharterCARE is listed at $160 million. However, Centurion negotiated a lower price by offering to pay $80 million in cash, thus providing CharterCARE “with liquidity to operate as a stand-alone health system.”

Centurion intends to issue a combination of taxable and tax-exempt bonds to finance the full purchase price and transaction costs, according to the application.

The $80 million would enable continued reinvestment in critical services and infrastructure in Rhode Island with a list of already identified needs as follows:

• Overhauling the emergency room physical plant at Fatima
• Upgrading various areas at both hospitals
• New imaging equipment and robotic surgery equipment
• Parking lot improvements
• Hiring an additional 200 clinical and support employees

The proposed sale will return a pair of longstanding community hospitals to nonprofit status “and ensure that they are able to continue providing quality care to their surrounding communities, including to traditionally underserved populations,” the application states.

The financial troubles of Prospect Medical have been well publicized as the company has closed and disinvested in its hospitals across the country. Recent unsealed court documents showing the company had over $24 million in accounts payable overdue for 90 days or more as of Oct. 31, 2023.

Plans include expansion and improvement of existing services, which include home health behavioral health, surgery center, and emergency department under a new parent entity known as CharterCARE Health of Rhode Island, Inc. 

“The Centurion Transacting Parties have no plans for any reduction of existing services and/or facilities associated with the Proposed Transaction,” according to the application.

Another declaration: “The Centurion Transacting Parties have no plans to reduce staffing levels.”

Among the estimated 200 new jobs are high paying positions in information systems, revenue cycle operations, management, nursing administration, and finance. “By filling these positions locally, the New CharterCARE System will create approximately$19.5 million in additional salary income within the state,” the application states.

Under the state’s Hospital Conversions Act (HCA), the attorney general’s office and health department have 180 days to determine whether all statutory criteria are met and the public’s interest is protected before issuing their respective decisions. That makes June 11 the deadline to complete their review.

Now the next step will be two public hearings to solicit input — both in person or virtually — with dates, times, and locations of these meetings set to be announced shortly.

CharterCARE hospitals are licensed for 312 beds at Fatima 312 and 220 beds at Roger Williams 220. The health system counts a total of 2,454 employees, said CharterCARE Health Partners spokesperson Otis Brown.

“The Centurion Foundation looks forward to the formal hearing process and the opportunity to explain its mission and charitable model, as well as its plans to return CharterCARE hospitals to not for profit status,” Brown said in a statement Tuesday morning.

“Post transaction, Centurion is committed to ensuring that Roger Williams and Fatima continue to provide essential services and high quality care to patients in the community.”

This story has been updated with comment from CharterCARE Health Partners spokesperson Otis Brown.