Massachusetts governor says Steward Health Care must give 120-day notice before closing hospitals

BOSTON (AP) — Gov. Maura Healey said Thursday she is pressing Steward Health Care to adhere to a state Department of Public Health regulation that hospital owners must give 120 days notice before any medical facility can close in Massachusetts.

Healey made the comment a day after a bankruptcy judge allowed Steward’s decision to close two Massachusetts hospitals. Steward announced July 26 its plan to close the hospitals — Carney Hospital and Nashoba Valley Medical Center — on or around Aug. 31 because it had received no qualified bids for either facility.

The Dallas-based company — which announced its bankruptcy May 6 and two days later said it planned to sell off the 30 hospitals it operates nationwide — said it received qualified bids for six other hospitals it operates in Massachusetts.

“I’ve been clear with Steward, they need to stay open for 120 days. We need to have a smooth transition. Steward made the call to close those two hospitals,” Healey told reporters. “We have been hard at work looking to secure a deal that will ensure a smooth transition of ownership away from Steward to a responsible operator."

Asked if requiring the hospitals to remain open for the 120 days is possible, Healey said “yes, yes, yes.”

“And the lenders have got to break the leases. We've got to break the leases. It's ridiculous we're in this situation because of the greed of Steward and (Steward CEO) Ralph de la Torre," she said.

A spokesperson for Steward did not immediately respond to a request for comment.

Healey was referring to lease payments Steward owes after selling their hospitals' physical properties — including land and buildings — to another company. Both Steward and the state have argued that requiring potential buyers to assume those payments instead of negotiating their own leases — or buying the hospitals properties outright — was making it hard to transfer ownership of the hospitals.

Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston approved a motion by Steward on Wednesday to toss out the master lease binding the Massachusetts hospitals.

In a letter to Steward dated Tuesday, U.S. Sens. Edward Markey and Elizabeth Warren and other members of the state's all-Democratic congressional delegation also pointed to the state regulation requiring that a hospital formally notify the state of its intent to close its services 120 days before the proposed closure date, giving state health officials time to conduct public hearings.

“Steward’s financial crisis does not exempt the company from following the law, nor does it relieve Steward and its corporate enablers from their moral obligation to the public,” the lawmakers wrote.

Massachusetts has also agreed to provide about $30 million to help support the operations of six hospitals that Steward Health Care is trying to turn over to new owners.

The payments are advances on Medicaid funds that the state owes Steward and are being provided contingent upon an orderly movement toward new ownership. The $30 million is also contingent on Steward hitting milestones and cannot be used for rental payments, debt service or management fees.

The company’s hospitals are scattered across eight states.

A Senate committee voted last week to authorize an investigation into Steward’s bankruptcy and to subpoena de la Torre. The subpoena would compel de la Torre to testify before the Senate Health, Education, Labor, and Pensions Committee at a hearing on Sept. 12.