The Rhode Island General Assembly approved legislation Feb. 10 to provide an $18 million backstop to help close the purchase of two struggling Rhode Island hospitals and prevent their closure.
The legislation now heads to Rhode Island Gov. Dan McKee’s desk.
The legislation authorizes a supplemental “rainy day” fund from the state to support Centurion Foundation’s purchase of bankrupt Los Angeles-based Prospect Medical Holdings’s North Providence, R.I.-based Our Lady of Fatima Hospital and Providence, R.I.-based Roger Williams Medical Center, according to a Feb. 10 news release.
Centurion, an Atlanta-based nonprofit, received approval in June 2024 to purchase the hospitals, but has struggled to secure private investors to purchase the bonds needed to close the deal, the release said. The foundation also missed a Jan. 30 deadline from a federal bankruptcy judge to purchase the facilities, but was given a Feb. 27 extension.
The state funds come from a secondary rainy day fund created in 2023 with federal pandemic recovery money and would serve as a safety net for investors to not be spent “if all goes well,” according to the state’s General Assembly.
“It would be tapped only if Centurion fails to make its debt payments, and only after Centurion has used $9 million set aside from the bond sale for the same purpose,” the release said. “The state funding would cover two years of debt service on the 30-year bonds.”
State House Speaker K. Joseph Shekarchi and state Senate President Valarie Lawson said in a shared statement that Rhode Island “cannot afford a scenario” wherein Roger Williams and Fatima close and that the state’s other hospitals cannot take on the 300,000 patients or the 55,000 emergency department visits the hospitals see annually.
“With a great deal of involvement from the health department and the attorney general, the state has imposed many, many safeguards as conditions of this purchase to ensure the long-term stability of these two hospitals, and our finance committees and staffs have been diligent, despite the time pressure, in making sure Centurion is prepared to support the hospitals and will work to right the ship after mismanagement by the current owner,” the joint statement said.
“While the entire health sector, nationally, faces many uncertainties in the current environment, this sale, which would return the hospitals to nonprofit status, is the best available path forward for a better future for Fatima and Roger Williams, and for public health in Rhode Island.”
A separate piece of legislation is also advancing through the General Assembly to facilitate an expedited review process for alternative purchasers if Centurion cannot close the deal. The recent court extension authorizes the state to consider other offers and gives interested parties until Feb. 17 to submit proposals.
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