Prospect says it finally paid off its overdue bills at Roger Williams, Fatima hospitals

Roger Williams Medical Center in Providence. Its owner, Prospect Medical Holdings, Inc., claims it has now paid off $17 million in overdue bills to vendors at Roger Williams and at Our Lady of Fatima Hospital in North Providence. (Michael Salerno/Rhode Island Current)

Attorney General Peter Neronha has made it clear he doesn’t fully trust the owner of two urban safety net hospitals.

So will he take Prospect Medical Holdings, Inc. at its word that it has paid off the $17 million in overdue hospital vendor bills, as ordered by a Providence County Superior Court judge?

For now, Neronha’s office is noncommittal. Tim Rondeau, a spokesperson, did not comment when asked if the state’s top prosecutor would take a written position on Prospect’s July 1 affidavit confirming it had paid off its outstanding bills. Rondeau said in an email Monday that the office was still reviewing the court filings.

In November, Neronha’s office sued Prospect for violating conditions of a 2021 agreement concerning its stewardship of Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence. Among other violations, Prospect failed to pay hospital vendors on time, with $24 million in overdue, unpaid bills as of 2023. In June, Superior Court Judge Brian Stern sided with Neronha, ordering the company to pay $17 million (the amount overdue by more than 90 days) within 10 days of June 26.

George Pillari, Prospect’s senior vice president and chief performance officer, submitted a sworn affidavit on July 1 , in which he attested the company was “in compliance” with the court order and prior agreement with Neronha’s office. However, Pillari also wrote the company would be unable to provide proof through its second-quarter financial reports until July 30.

Which means the ball is back in Neronha’s court to decide whether he will accept Pillari’s word that the bills are paid off, or challenge the affidavit.

Stern has no immediate plans to issue another ruling in response to the affidavit, Jonathan Bissonnette, a spokesperson for Rhode Island Judiciary, said in an email.

Otis Brown, a spokesperson for Prospect, declined to comment.

The company previously warned in court filings that forcing it to pay off local bills would force it into bankruptcy. The Los Angeles-based company recently revealed in court documents in a separate lawsuit in Connecticut that it has been under federal investigation by the U.S. Department of Justice for more than six months.

The cash-strapped company has seen its hospital assets across the country suffer due to a weakened balance sheet. Some of the hospitals have shuttered while others, like Fatima and Roger Williams, face deteriorating operating conditions and severe safety issues, as detailed in court documents.

Paying off overdue bills is only one of the 85 conditions state regulators attached to their approval allowing Prospect to sell off its two Rhode Island hospitals and affiliated physician groups, home care and hospice agencies and offices to a new nonprofit owner. The $80 million sale to The Centurion Foundation cannot proceed until all conditions are met; separately, Prospect and Centurion must also get a separate licensing change approval from the Rhode Island Department of Health for the deal to go through. Review on the licensing application has not begun because of deficiencies the health department found in the original application. A completed application has not been resubmitted as of Monday.

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