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Earlier this year, CharterCare, Rhode Island's third-largest healthcare group, announced it was being sold.
Prospect Medical Holdings presently owns and operates Roger Williams and Our Lady of Fatima hospitals and a range of other healthcare interests in Rhode Island and many beyond.
Those Rhode Island hospitals are suffering significant financial problems.
The proposed buyer, The Centurion Foundation (Centurion), is a Georgia-based foundation that has just one full-time employee, according to the Foundation’s most recent tax documents.
Centurion’s Partner Is Out
When the deal was announced, Centurion was making the deal in partnership with QHR Health, but GoLocal has learned that QHR is now out of the deal.
Otis Brown of CharterCARE confirmed the players on the Centurion team.
“No implications to our strategic and operational directions. Their initial consulting work was completed and we needed different types of consultants. Some of that work has already been redistributed to other consulting firms," said Brown.
Earlier this month, the Rhode Island Department of Health (RIDOH) and the Attorney General’s office announced the application was “complete” and the formal review process would begin.
How Would a Company with One Employee Run the Hospital System?
According to tax documents, Centurion has just one full-time employee — Ben Mingle, the president — who receives $430,094 in compensation.
Greg Grove is listed as the CEO, receives a compensation package of $123,412, and serves as a director as well — he is believed to be part-time.
“Centurion looks forward to the formal review process and sharing its operational plans for success. They have spent considerable time with the local management team to develop confidence in their abilities to execute the business plan," said Brown.
Centurion says about itself, “We specialize in meeting community needs and navigating complex situations which leverage our expertise in real estate, operations, and finance. Our principals have completed over 100 financings across the nation creating hundreds of millions in savings for the communities and clients we serve.”
Financial Troubles
On November 9, RIDOH issued an Immediate Compliance Order requiring Prospect Medical Holdings of California — owner of Roger Williams Medical Center and Our Lady of Fatima Hospital — to ensure the continuity of health services and care at the facilities by acting immediately to stabilize the two facilities financially.
According to the department, bills for supplies are going unpaid, and a result, nearly 20 surgeries had to be cancelled in October.
This Immediate Compliance Order was issued to Prospect Medical Holdings and related entities after a thorough, extensive review by RIDOH determined that Prospect’s underfunding of the hospitals is impacting operations.
A RIDOH investigation revealed that, as of October 24, more than 250 of the hospitals’ approximately 830 vendors were operating with the hospitals on a “cash on demand” basis. This means they only deliver supplies if they are paid at the time of delivery. This is generally reserved for payors with a history of non-payment. The average time it takes the hospitals to pay bills (“days payable outstanding,” or DPO), was in excess of the 90-day limit set when the acquisition of the facilities was approved in 2021.
Unpaid vendors have included suppliers of hip joints, catheters, endoscopes, and eye lenses. The procedures that were canceled included endoscopies, eye surgeries, and a spinal surgery. There is no indication that issues with vendors ever prevented emergency procedures from being performed.
Merger Application "Complete"
RIDOH and the Attorney General's office, the two State regulators empowered to oversee hospital conversions in Rhode Island, notified the parties involved in the proposed hospital conversions of Roger Williams Medical Center and Our Lady of Fatima Hospital that their application has been deemed complete to initiate formal review.
The Attorney General and RIDOH will now have 180 days to review the application under the Hospital Conversions Act (HCA), before issuing their respective decisions. Consistent with the standard process set forth by statute, the Attorney General’s Office will make the application public in mid-January after completing a full review to protect the confidential information of the transacting parties, in accordance with the provisions of the HCA. The review process will also include public comment meetings and hearings.