Los Angeles-based Prospect Medical Holdings is working with restructuring advisers while exploring strategies to address its financial challenges, The Wall Street Journal reported Jan. 8.
Here are eight things to know:
1. The for-profit health system is facing pressure from regulators in multiple states regarding its finances and facility conditions, the Journal reported.
2. Prospect has been working to sell 10 of its 16 hospitals amid an ongoing Justice Department investigation. The system operates seven hospitals in California, four in Pennsylvania, three in Connecticut and two in Rhode Island.
3. In November, Rhode Island's director of health approved the sale of Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence to Atlanta-based Centurion Foundation. The hospitals are operated by Prospect's Providence-based CharterCARE Health Partners.
4. Centurion Foundation said it is aware of the reports of Prospect's restructuring and shared the following statement with Becker's:
"We want to make it clear that the Centurion Foundation remains fully committed to the agreement to acquire CharterCARE Health Partners from Prospect Medical Holdings, and the terms and conditions approved by state regulatory agencies," according to the Jan. 10 statement. "We continue to work closely with all parties to advance the sale closure in the very near future."
5. In June, Rhode Island Attorney General Peter Neronha gave Prospect approval to sell the hospitals but later filed a motion in July seeking to hold Prospect in contempt for failing to comply with a court order to pay $17 million in outstanding vendor bills. He canceled the motion after Prospect complied.
6. Yale New Haven (Conn.) Health planned to buy Prospect's three Connecticut hospitals for $435 million but filed a lawsuit in May to exit the deal, citing facility mismanagement.
7. Yale New Haven Health has alleged that Prospect has fallen behind on vendor payments, property taxes and pension contributions in recent years, the Journal reported.
8. Prospect has enlisted management consulting firm Alvarez & Marsal and law firm Sidley Austin to explore a potential restructuring and other options, the Journal reported, citing sources familiar with the matter.