Steward directed staff to delay payments to vendors, former controller says

Late payments from Dallas-based Steward Healthcare to its vendors, such as advertising firms and suppliers, were not just an oversight, several former system finance employees told Bloomberg

Mike Green, who worked as controller for three of Steward's Ohio hospitals in 2018, told Bloomberg that Steward instructed staff to delay payments to vendors in an effort to improve its short-term cash flow. 

"Vendors that were used to receiving a payment in 30 days were waiting 90 and sometimes more than that," Mr. Green said. "It snowballed to where we were struggling to get supplies in a timely manner."

As a result of the late payments, some vendors have stopped providing services to Steward, while others have sued the health system. 

Two advertising firms sued to collect billings totaling more than $2 million; a linen services provider sued for $317,000 in delinquent payments; and a New York utility firm sued for $250,000 in natural gas bills, according to Bloomberg.

Jonathan Jamoulis, a co-owner of Cape Cod Cafe, said his restaurant stopped delivering pizzas to Brockton, Mass.-based Steward's Good Samaritan Medical Center because Steward wouldn't pay until six months had passed and thousands of dollars in bills piled up, according to the report. 

Steward told Bloomberg its billing disputes with vendors have been resolved. It also said the delays reflect the difficulty of integrating payment systems into the hospitals it purchased, as many are often in financial distress.

"We continue to work diligently on this transformation," Steward told Bloomberg.

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