An appeal will be heard by the Pennsylvania Supreme Court regarding Los Angeles-based Prospect Holdings' fall 2022 closure of acute care services to Delaware County (Pa.) Memorial Hospital, owned by Springfield, Pa.-based Crozer Health, the Philadelphia Inquirer reported Dec. 14.
Crozer Health, whose parent company is Prospect, attempted to end all services at DCMH by Nov. 20, 2022, with a goal of turning the hospital into an inpatient behavioral health center by spring 2023.
The transition plan was then paused in October 2022 by a Pennsylvania judge after a petition was filed by the Foundation of Delaware County to block the closure. The foundation, which represents the legal interests of the nonprofit that sold Crozer to Prospect in 2016, argued that Prospect's asset purchase agreement requires that it receive the foundation's approval prior to any hospital closures, and that the agreement is in effect until July 1, 2026.
Prospect, the foundation, and the Pennsylvania Attorney General's Office then made an agreement in October to halt the legal argument regarding the hospital's closure to give Prospect a 270-day window to sell Crozer to a successor.
However, in May 2023, a Pennsylvania appeals court reversed the lower court's ruling that blocked Prospect from closing DCMH's services, which is what the new appeal revokes, according to the publication.
In the appeal, the state Supreme Court will consider whether the Commonwealth Court made a mistake by "substituting its judgment for that of the trial court" when the ruling was reversed "on the grounds that there was insufficient evidence of irreparable harm," according to the publication.
"We're delighted with the action of the court," Rocco Imperatrice III, a lawyer for the foundation, said in a Dec.15 press release. "Hopefully, there will eventually be much needed emergency services for the DCMH residents in the future."
The appeal comes as Crozer hospitals continue to face significant financial challenges like critical service loss, vendor payment struggles, funding for basic ambulance repairs, and worker layoffs. Additionally, due to a Prospect Medical Holdings' multistate cyberattack, Crozer's computer systems were offline for nearly three weeks in August.
"The Pennsylvania Supreme Court merely asserted jurisdiction over the appeal but did not rule on anything substantively," Prospect shared with Becker's in a statement. "The decision by the Pa. Commonwealth Court denying the preliminary injunction remains in effect. The Supreme Court will render its decision on this appeal many months from now. We look forward to advancing our position before the Supreme Court as we did successfully before the Commonwealth Court."
It is unclear if DCMH would return its acute care services should the Supreme Court act in the foundation's favor, the publication said. However, a company is reportedly willing to fully staff the hospital's emergency department, Mr. Imperatrice told the publication.