Steward delays hospital sales as protesters rally against closings - The Boston Globe (2024)

Leaders of the state’s largest nursing union called on Governor Maura Healey and other state and local officials to take whatever steps are necessary to save both Carney and Nashoba Valley.

The two hospitals “are absolutely essential to the lives, health, and safety of tens of thousands of people in the communities served by these facilities” who will be forced to seek care elsewhere, said Katie Murphy, president of the Massachusetts Nurses Association.

Some speakers at Monday’s rally, attended by US Senator Ed Markey, US Representatives Stephen Lynch and Ayanna Pressley, and Boston Mayor Michelle Wu, called on the Healey administration to take forceful steps to keep the hospitals open.

Among the options they discussed were for Healey to declare a state of emergency, to transfer the facilities to the city, or put them into state receivership under the Department of Public Health. Some protesters gathered nearby even suggested the state seize the hospitals and their land by eminent domain.

The atmosphere was tense, as rain-soaked demonstrators pushed the politicians in attendance to commit to concrete action that would keep the hospital’s lights on. Angry chants of “Carney!” and “eminent domain!” echoed through the crowd, often drowning out the speakers.

One of the speakers, State Senator Nick Collins called for “any and all extraordinary action” to save Carney, urging the governor to enforce a 120-day notice required for hospital closures under state law.

Steward filed for bankruptcy on May 6 and is selling its hospitals in Massachusetts and seven other states, along with its physicians network, called Stewardship Health, to pay off creditors.

Healey, speaking at a bill signing ceremony Monday in the governor’s ceremonial office in the State House, blamed the closures of Carney and Nashoba Valley on Steward and its founder and chief executive, Ralph de la Torre, who she said ran the hospitals for personal gain. Steward has blamed its financial squeeze on inadequate government payments.

“It’s Steward’s decision to close these hospitals,” Healey said. “There’s nothing that the state can do, that I can do, that I have the power to do, to keep that from happening.” She said her administration was “focused on health care, delivery of health care to patients, protecting jobs, protecting the stability of the market,” and saving the remaining hospitals.

Steward’s filing gave no reason for pushing back the sales hearing for the other hospitals by two weeks, until Aug. 13. But court filings over the weekend suggested final details of the hospital sales were still being negotiated, including state financial backing for the surviving hospitals and terms of the hospitals’ leases with outside property owners.

In one filing, Steward said it was “finalizing a commitment from the Commonwealth of Massachusetts to provide $30 million in funding to support the hospitals’ operations as they are sold.”

State officials acknowledged making the commitment but wouldn’t specify Monday what party would receive the state funding. A “transformation committee” appointed by Steward is running the hospitals during the bankruptcy under court supervision.

Healey has repeatedly said the state would not provide money to Steward’s leaders, whom she accused of “greed and mismanagement,” or to the firms — Medical Properties Trust and Macquarie Infrastructure Partners — that own its real estate and collect rents from the hospitals. Many in Massachusetts want to hold her to that promise.

“Hopefully the state can give the money over in such a way that not a single cent goes to MPT or Macquarie, or can be used in any other way than to keep these hospitals operating while they’re still technically in Steward’s hands,” said physician and attorney Paul Hattis, senior fellow at the Lown Institute, a health care think tank in Needham.

Healey repeated on Monday that “not a dime goes to Steward” in the state’s backing, suggesting the hospitals are now effectively owned by their lenders. She called for “a smooth transition to new ownership.”

The state will be advancing money owed to Steward through a so-called waiver program under which Massachusetts funds its Medicaid program, called MassHealth, for low-income residents. The federal government, which also funds MassHealth, agreed in 2022 to waive its standard Medicaid requirements in favor of procedures Massachusetts set up to operate MassHealth as a Medicaid managed care program.

Advancing the $30 million will “ensure that all of Steward’s hospitals in Massachusetts can continue to operate through the end of August,” said Karissa Hand, a spokeswoman for the governor.

The state funding comes as Dallas-based Steward is running low on bankruptcy financing. It’s contingent on movement toward new owners at the other six hospitals and can not be used for rental payments, debt service, and management fees, according to state officials.

Steward also filed a motion in US Bankruptcy Court in Houston to reject a “master lease” it had signed in 2016 obliging its eight hospitals in Massachusetts to pay about $100 million a year in rent to MPT through 2040. MPT later sold a 50 percent interest in the lease to Macquarie.

Under the rules of bankruptcy proceedings, debtors are entitled to reject contracts under certain circ*mstances. Steward said it has lost nearly $100 million operating its Massachusetts hospitals in the first five months of this year, according to the court filing.

On Friday, Steward said it had received no qualified bids for Carney and Nashoba Valley. It said it plans to close both of them by Aug. 31, even though state law requires 120 days’ notice before hospital closures.

The company has received bids for the other six hospitals: St. Elizabeth’s, Holy Family Hospital in Methuen and Haverhill, Good Samaritan Medical Center in Brockton, Morton Hospital in Taunton, and St. Anne’s Hospital in Fall River. But it has yet to identify the bidders or disclose how much they are offering to pay.

In a Sunday filing, Steward said it had also postponed the court date for bankruptcy Judge Christopher Lopez to review and sign off on the sale of its hospitals in Arkansas, Louisiana, Ohio, Pennsylvania, and Texas for two weeks, from July 31 to Aug. 13. The sales hearing for the doctors group, Stewardship, was also postponed until Aug. 13.

Samantha J. Gross of the Globe staff contributed to this story.

Robert Weisman can be reached at robert.weisman@globe.com. Camilo Fonseca can be reached at camilo.fonseca@globe.com. Follow him on Twitter @fonseca_esq and Instagram @camilo_fonseca.reports.