PROVIDENCE — The CEO of Roger Williams Medical Center claimed in court earlier this year that the for-profit safety-net hospital could close if its owner, Los Angeles-based venture capital firm Prospect Medical Holdings, was forced to repay millions of dollars it owes its vendors.
But, court documents show, the 220-bed acute care hospital is also facing another risk: losing its longstanding relationship with Boston University’s School of Medicine and, with that, its designation as a teaching hospital.
According to a previously sealed March 13 affidavit obtained by the Globe, CEO Jeffrey Liebman said that he had “received communications from leadership at [Boston University] with concerns and inquiries as to the status” of the court order forcing Prospect to pay back $17 million of the $24 million it owes in unpaid bills, which could “likely result in Boston University School of Medicine terminating its relationship with [Roger Williams Medical Center].”
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In a statement sent to the Globe, hospital spokesman Otis Brown poured cold water on the idea that the affiliation was at risk, despite the chief executive’s comments in court.
“We continue to have a strong relationship with Boston University and we do not have any concerns that this mutually beneficial partnership will change,” said Brown, who repeatedly declined to comment on the court’s order.
Maria Ober, a spokeswoman for Boston University’s School of Medicine, echoed that statement in her own: “We have had a strong, long-standing relationship with Roger Williams Medical Center.”
Roger Williams Medical Center has been affiliated with Boston University’s School of Medicine since 1997, a year after Roger Williams’ 28-year-long affiliation with Brown University ended, and three years after Roger Williams’ clinical cancer center lost its National Cancer Institute designation. At the time, the connection with Boston University was seen as a bright opportunity for Roger Williams, allowing physicians to become faculty members in Boston and access what was then $84 million in research funds — five times what they had been able to access with Brown University.
Despite Roger Williams Medical Center’s ownership changes and challenges, its affiliation with Boston University has been consistent, bringing fellows and residents to the hospital. But Prospect’s money troubles may now be threatening that relationship.
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In addition to Roger Williams, Prospect owns Our Lady of Fatima Hospital in North Providence, another for-profit facility serving some of the state’s poorest residents. Though Superior Court Judge Brian Stern on June 12 gave Prospect 10 days to pay $17 million in unpaid bills for both of the hospitals, that deadline came and went. It is unclear whether any bills were paid. Prospect’s lawyers previously warned that if the judge attempted to force Prospect to pay the hospitals’ bills, Prospect could have the hospitals file for bankruptcy, or even close them.
On July 1 Prospect’s attorneys filed an affidavit, which was obtained by the Globe, attesting that they “will be able to confirm compliance” with the court order and pay their vendors by July 30. On Friday, Rhode Island Attorney General Peter Neronha filed a motion to hold Prospect in contempt for its failure to pay.
Neronha said his office “has not received sufficient evidence that Prospect has indeed paid its outstanding invoices, in defiance of the court, and defiance of its moral obligation to operate Fatima and Roger Williams hospitals in a manner that does not jeopardize patient care.”
“We have complied with the judge’s order and do not understand the attorney general’s motion,” Prospect said in a statement to the Globe on Friday.
Roger Williams Medical Center treats a large number of individuals from low-income and underserved communities who rely significantly on Medicaid. If Boston University’s School of Medicine were to terminate its relationship with the hospital, “RWMC would lose its status as an academic medical center and also lose its residents and fellows, who provide important services to the RWMC patients and community,” said Liebman in the March affidavit.
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Earlier this year, Liebman told the Globe that Roger Williams had a long history of providing training for physicians through residencies and fellowships. He downplayed the significance of the hospital’s relationship with Boston University’s School of Medicine at the time.
“We don’t have — and never really have had — as much of a clinical affiliation with Boston University because of distance [and] things like coverage issues when patients need to be taken care of post-operatively or things like that,” Liebman, who said the hospital was looking to partner “with everybody,” told the Globe.
Executives at Prospect are trying to exit the health care business. Across the United States, they’ve shuttered ambulatory units, and put hospitals up for sale. The Centurion Foundation, an Atlanta-based private nonprofit, is attempting to buy Roger Williams and Fatima hospitals. Together, the two Rhode Island hospitals employ about 2,800 people and care for thousands of patients each year.
When Neronha approved the sale of the two hospitals to Centurion on June 20, he added 40 different caveats — virtually guaranteeing that Prospect would not make a profit on the deal.
Last week, the hospitals’ spokesman declined to comment on where the deal with Centurion stood. In his statement about the hospitals’ relationship with Boston University, he said Centurion considers the affiliation “one of the key strengths” of Roger Williams Medical Center.
When asked how a potential deal with Centurion would impact its academic affiliations, Liebman told the Globe in an interview earlier this year that Roger Williams “looks forward to continue to provide the future doctors that hopefully ... will stay here because of that physician shortage we have.”
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“We will continue to take [Boston University’s] residents, fellows, and all that,” said Liebman. “We will look to them because we have a relationship with them. It will be natural for us. But thus far, they haven’t had a lot of interest in coming down here either.”
Still, the impact of forcing the hospitals to immediately pay millions in unpaid bills “would be devastating and would likely result in the closure of the hospitals or, at the very least, curtailment of services,” said Liebman in his affidavit. “The North Providence and Providence surrounding communities would be left without the needed services provided in these long standing community institutions.”
This article has been updated to include statements from the R.I. Attorney General and from Prospect Medical Holdings.
Alexa Gagosz can be reached at [email protected]. Follow her @alexagagosz and on Instagram @AlexaGagosz.