State officials in Rhode Island unveiled a two-track strategy Thursday for trying to resolve the future ownership of cash-strapped Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence.
The Atlanta-based Centurion Foundation won state approval in 2024 to buy Roger Williams and Fatima. But the foundation has struggled since last year to finalize its financing and it missed a Jan. 15 deadline to close the deal.
On Thursday, Rhode Island Attorney General Peter Neronha filed a motion in bankruptcy court that, if approved, would allow the state to seek new buyers for the hospitals while allowing more time for the Centurion Foundation to complete its financing by Feb. 27.
At the same time, Gov. Dan McKee and General Assembly leaders are supporting the introduction Thursday of legislation that would create an $18 million reserve fund for the hospitals funded by taxpayers. Centurion calls that necessary to complete its financing for the transaction.
In a joint statement, Neronha, McKee, House Speaker Joe Shekarchi and Senate President Val Lawson said, “These hospitals are crucially important to maintaining stability within Rhode Island’s health care system. The state is committed to working on solutions that promote the transfer of these hospitals to a purchaser who will keep them open and thriving.”
During a hearing in U.S. Bankruptcy Court for the Northern District of Texas on Thursday, Judge Stacey Jernigan indicated support for the change requested by Neronha.
Jernigan said the plight of healthcare in Rhode Island was on her mind after she saw coverage of the shooting at Brown University that killed two students in December. She described seeing a face familiar to her from her courtroom – Neronha – during the ensuing coverage.
“It just made me hurt extra, thinking, what if they need these hospitals?” the judge said from the bench.
Those injured in the shooting were treated at Rhode Island Hospital, which is owned by Brown University Health.
The hearing indicated the deadline for other interested buyers to make a pitch for the hospitals will be 5 p.m. on Feb. 17.
“We know these things take a while,” Jernigan said of the stalled sale of the hospitals, “and I hope we’re near the end.”
Meanwhile, Centurion CEO and Chairman Ben Mingle said in a statement that passing the legislation for the $18 million reserve fund “will satisfy a key requirement of investors, which was to see meaningful financial support from the State of Rhode Island for these hospitals. To date, we have verbal commitments from several investment groups meeting the needed $85 million in bonds, enough to fund the transition and return these hospitals, and their 2,400 employees and physicians, to not-for-profit status and local control.”
The hospitals have continued to operate funded by an escrow account required by Neronha as part of a 2021 change in the ownership of current owner Prospect Medical Holdings of California. Mingle said that arrangement will continue past Jan. 30.
Prospect filed for bankruptcy in January 2025.
State takeover option this week
A U.S. Bankruptcy Court order in Texas had previously set Jan. 30 – this Friday – as the time for a possible state takeover of Roger Williams and Fatima.
At the same time, with Rhode Island facing a tough fiscal climate, the state is not well-suited to take on the cost of running two hospitals.
“It would be substantially more than $18 million,” Speaker Shekarchi told Ocean State Media in a recent interview. “We’ve heard estimates of over $100 million.”
In a letter dated Jan. 16, Centurion’s top executive said the foundation had secured verbal commitments from four investors sufficient to complete its financing, provided that the state creates an $18 million reserve fund.
“Subject to the timing of enactment of the legislation establishing and funding the bond reserve fund, Centurion is working diligently to close this transaction not later than February 28, 2026,” Centurion CEO Ben Mingle wrote in the letter.
United Nursing and Allied Professionals, which represents half of the roughly 2,500 workers at both hospitals, is urging top state officials to support Centurion’s effort to buy the hospitals.
“We’ve had the speaker and the governor and the Senate president say that they’re prepared to do anything to keep these hospitals open and here’s their opportunity to do that,” said Chris Callaci, general counsel for UNAP.
UNAP was initially a sharp opponent of Centurion’s attempt to buy Roger Williams and Our Lady of Fatima, arguing that the foundation’s plan to finance the acquisition through debt was questionable and pointing to Centurion’s lack of previous experience in running a hospital.
Callaci said the union’s view changed due to conditions imposed on the transaction by Neronha, and since UNAP does not have a positive view of the only other entity that has been publicly mentioned as a possible buyer, Prime Healthcare of California – owner of Landsmark Medical Center in Woonsocket.
A possible ‘devastating’ ripple effect
There’s a lot on the line. Roger Williams Medical Center and Our Lady of Fatima are among the biggest employers in their respective communities of Providence and North Providence.
The emergency rooms at the hospitals receive a combined 50,000 visits a year, and if Roger Williams or Fatima were to close, the spillover could overwhelm other hospitals in the state.
“I think it would be devastating for the rest of Rhode Island’s healthcare system,” said Dr. Philip Chan, an associate professor in the Department of Medicine at Brown University. “These hospitals are such an important part of our overall healthcare-hospital system.”
Both Roger Williams and Fatima have lost money for years.
Centurion CEO Ben Mingle has argued the foundation, which lacks previous experience in running a hospital, can improve the economic performance of the hospitals.
Rhode Island has a lower reimbursement rate for public and private health insurance than Connecticut and Massachusetts. That creates a series of challenges for healthcare in the Ocean State, particularly for institutions like Roger Williams and Fatima, since they treat a higher percentage of low-income residents.
Shekarchi, whose father worked at the former Memorial Hospital in Pawtucket, recalled how Miriam Hospital on the East Side of Providence was stressed when Memorial closed about eight years ago.
If Roger Williams or Fatima were to close, the speaker said, “it would be very bad for the whole continuum of care.”
This story has been updated with information from a hearing in bankruptcy court.
