Home Care In Prospect, CT

Legal wrangling continues between Prospect Medical Holdings and Yale New Haven Health over their proposed deal involving Waterbury, Manchester and Rockville hospitals.

Prospect has filed an objection to Yale amending its complaint citing concerns that Prospect “seriously breached the purchase agreement by failing to contribute to its employees pension plans at East Connecticut Health Network, and Manchester and Waterbury hospitals.” As a result, Pension Benefit Guaranty Corp. has filed a $4 million lien against Prospect, according to Yale’s court correspondence.

Dana Marnane, communications director for Yale New Haven said, the liens add to the more than $100 million Prospect owes the state and local municipalities. This left Yale with no choice but to issue another notice of breach of the asset purchase agreement, Marnane said.

In its response to the court, Prospect said the amendment “Yale seeks to apply to its operative complaint in the Second Amendment Request are improper because they relate solely to alleged events that took place after the April 2024 date by which the parties expected to have closed the transactions” by the parties’ Asset Purchase Agreement as well as the commencement itself in May 2024.”

Representatives of Prospect Medical declined to comment.

In its response to the court, Yale said Prospect’s opposition to its request to file its second amendment complaint is “nonsensical and meritless.”

Marnane said Prospect has “abandoned the communities and patients they are supposed to serve, making it impossible to close on the proposed sale of their Connecticut hospitals to Yale New Haven Health.

“These facilities require significant investment to recover from the serious deterioration and mismanagement they have suffered under Prospect’s ownership,” Marnane said. “Unfortunately, given Prospect’s disinvestment in its facilities and the debt it owes we must move forward with our lawsuit.”

Two new Pension Benefit Guaranty Corp. liens were filed on Oct. 30 – one for $5.4 million for Crozer-Keystone Health System Employees Retirement Plan and a second for $2.2 million for Eastern CT Health Network Inc’s pension plan. Prospect Waterbury is named as the debtor on each lien.

At the end of last month Pennsylvania Attorney General Michelle Henry announced the filing of a lawsuit against Prospect Medical Holdings alleging “years of the company’s mismanagement and neglect of the Delaware County-based Crozer Health System.”

“The lawsuit alleges Prospect Medical has broken an Asset Purchase Agreement, approved by a court in 2016, by cutting services and closing facilities, while diverting funds to private shareholders and investors, rather than supporting the health care network,” according to the Pennsylvania Attorney General’s Office.

HARTFORD — A former psychiatrist at Manchester Memorial Hospital is alleging Prospect Medical Holdings engaged in insurance fraud by not discharging psychiatric patients who no longer required hospitalization in order to continue collecting insurance revenue, including federal Medicare and Medicaid dollars.

The lawsuit filed by Lawrence Peacock adds to Prospect's mounting legal challenges as the for-profit, California-based health care system is embroiled in a lawsuit with Yale New Haven Health over the proposed $435 million sale of Manchester, Rockville General, and Waterbury hospitals.

Nina Kruse, spokeswoman for Eastern Connecticut Health Network, which is owned by Prospect, would not comment Tuesday due to pending litigation.

Peacock, who was ultimately terminated from his position as medical director and vice chairman of the hospital's psychiatric department, filed a lawsuit in July 2020 in Hartford Superior Court. A trial is scheduled for next month with jury selection underway, according to the state's judicial website.

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A judge denied Prospect's motion for summary judgment in December.

In his role, Peacock was responsible for overseeing a 24-bed psychiatric unit at the hospital.

When Prospect took over ownership of Manchester Hospital in 2016, Peacock was told by his supervisor that his bosses would "stay off (his) back" as long as he maintained occupancy in the psychiatric unit at a minimum of 20 out of the 24 beds, according to the lawsuit.

For every day that a patient was admitted in the unit, Prospect was able to bill insurers, including government-funded insurers such as Medicare and Medicaid, for the patient's stay, thereby generating money for Prospect and its shareholders, according to the lawsuit.

"The implicit subtext" of Peacock's supervisor's comment, according to the lawsuit, was that Peacock should maintain the number of patients admitted to the psychiatric unit so that Prospect "could bill for its services, whether it was medically warranted or not."

On one day in 2018, according to the lawsuit, Peacock discharged between nine and 10 patients from the unit when the patients' admission was no longer medically warranted.

A short time later, Peacock's direct supervisor told him that he had been directed by a national vice president of development for Prospect to issue a warning to Peacock for doing "too many discharges in one day," which had caused the patient census to drop "too low," according to the lawsuit.

Peacock and other health care providers in the psychiatric unit were later instructed not to discharge any more than three patients per day, according to the lawsuit.

In July 2019, Peacock filed a complaint with the Connecticut attorney general's office, alleging patients were kept in the psychiatric unit when it was not medically necessary in order to pad Prospect's profits, which would constitute insurance fraud.

In January 2020, Peacock made a similar complaint internally to Prospect, and he was terminated from his position a short time later.

He is suing for lost wages, emotional distress, attorney fees, and wrongful termination.

Elizabeth Benton, spokeswoman for Attorney General William Tong, said Tuesday that the attorney general's office has an "active and ongoing investigation into Prospect Medical."

"That includes neither confirming nor denying these allegations as a component of that investigation," she said.

According to court documents, Prospect argues that Peacock was terminated as a result of "obstreperous and unprofessional conduct, lack of cooperation and collaboration with colleagues, and insubordination."

Prospect further argues that Peacock's "complaint about its census policies had nothing to do with his termination."

According to court documents, Prospect said Peacock remained medical director, continued to receive retention bonuses, and was offered a draft renewal contract that included a raise.

Prospect argues Peacock was reprimanded for using profanity and having inappropriate interactions with other behavioral health unit physicians and staff members.

Following a human resources investigation, Peacock was suspended with pay, and subsequently refused to return to work, according to court documents supporting Prospect's case.

Prospect argues Peacock was terminated because Manchester Hospital and Prospect could not reach an agreement on his contract renewal despite trying to do so for an extended period of time.

BROOKLYN (WABC) -- Firefighters have contained a wildfire that erupted in Brooklyn's Prospect Park on Friday evening.

Fire crews remained stationed in the park overnight if it re-ignites, officials said at a press conference.

A passerby reported the fire in Prospect Park at about 6:40 p.m., FDNY Commissioner Robert Tucker said.

The fire grew to about two acres in size in a "very inaccessible" and dense forested area of the park.

Fire Deputy Chief Joseph Duggan said that extremely dry vegetation and heavy winds contributed to the fire.

Over 120 firefighters responded to the fire, according to Chief Duggan.

Four engine companies remained on the scene overnight.

Some hot spots remained late Friday night, the fire commissioner said, but the fire is under control.

The fire was one of several reported brush fires in New York City, NYC Emergency Management Commissioner Zachary Iscol said.

Another brush fire along the Major Deegan in the Highbridge section of the Bronx late Friday and a Red Flag Warning remained in effect through Saturday.

Multiple wildfires in New Jersey were impacting air quality in the city, he added.

"This is the new normal of extreme weather," Iscol said. "It's all something we should be prepared for."

New York City Parks Commissioner Sue Donoghue said that the forest in Prospect Park is the oldest standing forest in Brooklyn.

"Our urban forest here is so critical," she said.

Fire officials are still investigating the cause of the fire, Tucker said.

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Connecticut officials are investigating service cuts at Rockville General Hospital in Vernon that may have violated state laws, according to an Oct. 17 letter sent by the Office of Health Strategy to Prospect CT CEO Deborah Weymouth.

Rockville is one of three hospitals in Connecticut owned by Los Angeles-based Prospect Medical Holdings, along with Manchester Memorial and Waterbury Hospital. The facilities have been at the center of a long-awaited pending sale to Yale New Haven Health that’s mired in legal disputes and has at times seemed on the brink of collapse.

Questions of unauthorized service cuts come amid a barrage of revelations regarding the diminished financial and operational state of the hospitals. In just the past month, Prospect was hit with federal liens for failure to pay into the pension plan for its Connecticut employees. Reports released also documented rusting equipment in operating rooms at Waterbury Hospital and delayed payments to physicians at Manchester Memorial Hospital.

According to the notice, the state determined that Prospect may have ceased providing medical/surgical and inpatient psychiatric services without obtaining permission from the state, known as a certificate of need. In March 2020, the state granted Rockville, and other hospitals, a waiver to halt certain services in order to free up capacity to treat COVID patients. The waiver expired on July 21, 2021, at which point all services should have resumed.

“[It] appears that in actuality RGH ceased to provide all medical/surgical services around this time, did not seek a waiver for the cessation of these other services, and to date has yet to restore these other services. In addition, it also appears that RGH may have ceased providing all inpatient psychiatric services (both adolescent and adult) in or around June 2020 and has yet to restore those services as well,” OHS staff attorney Craig Sullivan stated in the notice.

A spokesperson with Eastern Connecticut Health Network, the health system that includes Manchester Memorial and Rockville General hospitals, did not respond to a request for comment.

The state’s inquiry comes a year after an investigation published by The Connecticut Mirror found that Prospect began eliminating services with the arrival of the pandemic, when the hospital received permission from the state to halt surgical services.

Records and employee testimony submitted to the state going back as far as 2021 show that the hospital took the cuts further, shuttering most of Rockville’s inpatient units. When the story was published in October 2023, longtime employees, union leaders and state lawmakers from the area said services remained extremely limited.

When asked why the state waited a year to launch an inquiry, OHS commissioner Deidre Gifford stated in an email that several factors influenced the timing, including the active certificate of need application for the acquisition by Yale New Haven and the crippling of operations at Prospect hospitals following the August 2023 cyberattack. The state said it used the agreed settlement reached between Yale and Prospect to address service concerns at Rockville.

“Taking compliance action while simultaneously negotiating a resolution to the same issues would not have been productive,” Gifford said.

“The agreed settlement reached in March 2024 included extensive provisions to address ongoing concerns at Rockville General Hospital and ensure continued community access to all required services, either at Rockville General Hospital or Manchester Memorial Hospital. The transaction has been tied up in litigation for several months … Since a resolution to the Prospect/Yale New Haven Health dispute has not been arrived at, and a court date is not set until April of 2025, OHS is pursuing further action.”

Prospect has until Nov. 8 to submit responses to the state.

“The inquiry process allows OHS to determine if and to what degree Rockville General Hospital may have ceased service delivery in several areas without state approval. We will be able to further assess appropriate action pending receipt of the facility’s response,” Gifford said in an emailed response to questions.

Termination of services by a hospital without state approval can result in civil penalties of up to $1,000 per day. If OHS pursues civil penalties, Prospect would have the opportunity to request a hearing.

Tim Tai, Senior Photographer

Connecticut Governor Ned Lamont and Comptroller Sean Scanlon called on Yale New Haven Health system and Prospect Medical Holdings to finalize a $435 million acquisition agreement.

Two years ago, the healthcare system first signed an agreement with Prospect Medical Holdings to acquire Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital. Since then, the parties have repeatedly clashed in court, with the YNHH system alleging that Prospect’s financial mismanagement and operational failures violated their purchase agreement. Prospect, in turn, has accused the healthcare system of delaying acquisition to lower the purchase price.

State officials argue that the deal’s collapse would have a “detrimental impact” on the communities the three hospitals serve, as they could lose access to medical coverage. Recently, the Connecticut Office of Health Strategy, or OHS, accused Rockville General Hospital of violating state law by terminating surgical and psychiatric services at the hospital without approval.

“The dispute lingers on, and I’m not quite sure we’ll be able to keep them out of the courthouse,” Lamont stated in a press conference on Tuesday. “So in the meantime, I care deeply about patient safety there, making sure that we monitor that situation closely.”

Lamont shared that in addition to the ongoing lawsuits, the alleged halting of services at the hospital has led him to involve an independent monitor who can oversee patient care. He wants to ensure that safety is not compromised as the dispute and budget concerns continue.

In an Oct. 17 letter acquired by Hartford Business to Deborah K. Weymouth, CEO of Prospect Medical Holdings’ Connecticut Operation, OHS asserted that the hospital system ceased providing critical services, including psychiatric care, without seeking additional permission and has not yet restored these services.

OHS has asked Prospect CT about the timeline and reasons for these service halts, demanding an explanation and supporting documents by Oct. 31.

Meanwhile, Prospect continues to procure debt.

Last month, the Pension Benefit Guaranty Corporation claimed that Prospect failed to contribute just over $4 million to the pension plan covering employees of Waterbury, Manchester Memorial and Rockville General hospitals.

The Corporation obtained liens placed on 47 properties associated with Prospect — meaning that it could force Prospect to sell them to cover their debt. To keep these properties, Prospect will have to pay off its pension obligations. Additionally, Prospect owes nearly $12 million Prospect to Pennsylvania’s Crozer-Keystone Health System Employees Retirement Plan, $67 million in tax liens from the state of Connecticut and $15.8 million in taxes to the city of Waterbury.

If Yale’s healthcare system were to acquire three Prospect hospitals, it would likely be responsible for part of this debt.

The YNHH system is seeking revised terms to continue the acquisition of the three hospitals.

“Without revised terms, we don’t see a path forward that would allow us to make the necessary investments in these facilities without jeopardizing our system’s financial sustainability and uphold our commitment to the communities that we currently serve,” Dana Marnane, director of public relations at Yale New Haven Health, wrote in a Thursday statement to the News.

After weeks of silence, on Oct. 17, Prospect issued a statement accusing Yale New Haven Health of waging “an aggressive campaign in both the courts and via the media to denigrate Prospect Medical’s Connecticut hospitals and employees” to reduce the negotiated purchase price of $435 million.

State officials hope the deal will be closed soon.

“I think there’s a lot of concerns within these communities that are affected by this,” Comptroller Sean Scanlon told Hearst Connecticut Media. “I think the time to get it done is now. And if it can’t be done, then I think we need to move on to what is the next best thing.”

In response, Lauresha Xhihani, the director of communications and marketing at Waterbury Hospital representing Prospect Medical Holdings wrote to the News that Prospect has been ready to close the deal since it was approved by state regulators.

The acquisition would add 700 more beds and roughly 4,400 more employees to the health system.

“The collapse of the deal for YNHH to acquire the three Prospect hospitals has a detrimental impact on the communities they serve,” state Sen. Saud Anwar SPH ’98, who chairs the Public Health Committee, wrote to the News in August.

Prospect Medical Holdings owns 16 hospitals in five states.

ASUKA KODA

Asuka Koda covers the Yale School of Medicine and the Yale School of Public Health. From New York City, she is a sophomore in Davenport majoring in Mathematics and Philosophy.