Home Care In Prospect, CT

The state has agreed to a settlement with Prospect Medical Holdings, which will allow the owner of three Connecticut hospitals to reduce services at one of them and consolidate two of them.

As part of the agreement reached late Friday, Prospect Medical can permanently end all services except for emergency room and behavioral health services at Rockville General Hospital in Vernon and start its consolidation with Manchester Memorial Hospital. But the consolidation would still require approval from the state Department of Public Health.

Prospect Medical Holdings, a private equity group that also owns Waterbury Hospital, entered chapter 11 bankruptcy proceedings in January. State officials – including Gov. Ned Lamont – have repeatedly said the three hospitals will stay open and continue to provide quality care during the proceedings.

Waterbury Hospital is part of the Greater Waterbury Health Network and Manchester and Rockville are part of the Eastern Connecticut Health Network.

“The people of Connecticut deserve better than this,” said state Sen. Jeff Gordon, R-Woodstock, who is a medical doctor and represents Vernon. “This decision by Office of Health Strategy (OHS) Commissioner (Deidre) Gifford once again highlights how out of touch with reality our state government is regarding local health care needs in Connecticut.”

Gifford, however, said in a statement that the settlement “protects critical resources” and ensures the local community access to emergency care.

Gifford, who has led OHS since January 2023 but worked in state government since 2019, has announced she will retire this summer amid criticism over her involvement in an abandoned audit that could have exposed potential Medicaid fraud.

Prospect had already cut back on services at Rockville Hospital without state permission, starting in March 2020, which led to a state investigation last year. As part of this new agreement, those services do not need to be restored and Rockville can instead be converted into a satellite campus of Manchester Memorial, which the company has been hoping to do since October 2020.

As a penalty, Prospect agrees to pay $300,000 to the state through the bankruptcy case. It must also host a community forum about the consolidation within 60 days and must provide financial and census data to the state upon request, according to the settlement.

“Each aspect of this agreement holds the Prospect applicants responsible for their actions and requires the company to notify all potential bidders in the bankruptcy case of the terms of the agreement,” Gifford said in a statement. “As various courts unravel the complex issues surrounding current and future ownership of the Prospect hospitals, our top priority continues to be the health and well-being of the patients and employees.”

State Sen. Saud Anwar, D-South Windsor, who co-chairs the legislature’s Public Health Committee, said it is important to keep Rockville General open, so reopening it with the current level of services will help the local community.

“Ideally, the resumption of all services would be preferable, but in the current financial environment, I do not know if that is possible,” Anwar said. “At this time, for the status quo in the emergency room and behavioral health to remain open, that will help the public.”

The company owes about $105 million in state taxes and is behind on pension payments. There have also been ongoing complaints that the three hospitals are struggling to pay bills under Prospect’s ownership, including paying vendors, healthcare providers and local property taxes.

In 2022, Yale New Haven Health signed a purchase agreement with Prospect to buy the three hospitals for around $435 million, but Yale later sought to lower the price based on deteriorating conditions at the hospitals. The two companies have since been embroiled in lawsuits over the potential sale.

Prospect has said it is “proceeding on a strategic pathway to realign its organizational focus outside of California” and that it plans to rededicate itself to its original mission of serving the community.

Deborah Weymouth, president and CEO of both Waterbury Health and the Eastern Connecticut Health Network, has said the bankruptcy is not an end, but “a new beginning.”

Earlier this year, Lamont signed legislation to create an emergency application process to preserve continuity of care in the event of a hospital bankruptcy. Public Act 25-2 requires OHS to issue a final decision on a completed emergency Certificate of Need application in 60 days or less.

Connecticut officials reached a settlement with Prospect Medical Holdings clearing a path for the operator to permanently shutter all services aside from the emergency room and behavioral health at Rockville General Hospital in Vernon, according to an agreement published on May 23.

Rockville is one of three hospitals in Connecticut owned by Los Angeles-based Prospect Medical Holdings, which filed for bankruptcy in January.

The settlement signed on Friday between Prospect and the state of Connecticut concludes an ongoing state investigation into unauthorized service cuts at Rockville launched in October of last year. Prospect agreed that Connecticut will have a $300,000 claim included in the bankruptcy case as a result of the termination of services, subject to approval by the court.

The terms require Prospect to maintain emergency services at Rockville for three years and keep existing inpatient behavioral health services “at or within 30 miles of their current location on the RGH campus.” However, it doesn’t require the operator to reopen services that were cut without state permission.

The agreement also grants Prospect permission from the state’s Office of Health Strategy, or OHS, to terminate Rockville’s status as a full-service acute care hospital and convert it into a satellite campus of Manchester Memorial Hospital, located 20 minutes away. Prospect must now also obtain permission for the consolidation from the Department of Public Health, which oversees hospital licensing, Wendy Fuchs, a spokesperson for OHS confirmed.

A spokesperson for the Department of Public Health did not immediately respond to a request for comment late Friday.

In a Friday press release, OHS Commissioner Deidre Gifford said the agreement “protects critical resources” for patients and families in the area.

“The agreement also holds the Prospect applicants accountable to the community, requiring public notice of past terminations and development of a strategic plan for the consolidated hospital. The plan must be developed with community input and presented to the community in a public forum,” Gifford’s statement read.

The agreement requires Prospect to announce the consolidation of Rockville with Manchester Memorial publicly, create an interim strategic plan for services at Rockville and hold a community forum within 60 days.

Spokespeople with Prospect Medical Holdings and Eastern Connecticut Health Network, which owns Rockville General and Manchester Memorial, did not respond to a request for comment.

In March, Suzanne Koenig, a bankruptcy-court appointed patient care ombuds reported that, during a visit to Rockville General, she found that surgical services, as well as the intensive care and medical-surgical units at the hospital had remained closed since March 2020. The company did not receive state permission to permanently close any of those services in advance of doing so.

State law defines a termination of services as “the cessation of any services for a period greater than one hundred eighty days.” Termination of services by a hospital without state approval can result in civil penalties of up to $1,000 per day.

The unauthorized cuts were the subject of an October 2023 investigation by the Connecticut Mirror.

When Prospect filed for bankruptcy earlier this year, state officials offered assurances that its three Connecticut hospitals would remain open and operating.

??“Some people think bankruptcy means the lights go out and the party’s over. That’s not true at all. These hospitals are very successful,” Lamont said during a press conference in the days following the bankruptcy announcement.

Although Rockville General will technically remain operational, it will no longer be a stand-alone, full-service acute care hospital.

A spokesperson for Lamont did not return a request for comment.

Rep. Tammy Nuccio, R-Tolland, whose district contains Rockville General Hospital, said Friday that the state had failed her residents.

“Profit over people. That’s what I think we’ve come to expect here unfortunately from OHS and the state when it comes to health care for residents that are not in large cities,” Nuccio said.

The agreement with the state will be binding for any future buyers of Prospect’s Connecticut hospitals.

Yale New Haven Health first reached a tentative agreement to purchase the three facilities from Prospect for $435 million in 2022. But the deal has been mired in complications since then, including lawsuits and, most recently, Prospect’s bankruptcy. In February, Yale said it would be “impossible” to close the deal.

An auction process for the Prospect-owned hospitals will take place through bankruptcy court.

In the state’s Friday announcement, OHS said the process is “ongoing.” In court documents, the sale hearing was tentatively scheduled for June 5, but no notice of hearing has been officially posted and spokespeople for Prospect and their lawyers have not responded to multiple requests regarding the auction timeline.

Katy Golvala is CT Mirror's health reporter. Originally from New Jersey, Katy earned a bachelor’s degree in English and Mathematics from Williams College and received a master’s degree in Business and Economic Journalism from the Columbia Graduate School of Journalism in August 2021. Her work experience includes roles as a Business Analyst at A.T. Kearney, a Reporter and Researcher at Investment Wires, and a Reporter at Inframation, covering infrastructure in Latin America and the Caribbean.

With the bidding process underway for a buyer to acquire Prospect Medical Holdings’ three hospitals in the state, three buyers have expressed interest but an official announcement is not expected until later this month.

None of the buyers’ names have been made public, according to state and health officials.

But there is anticipation and hope that a buyer will be found to keep the hospitals on solid footing after Prospect, a private equity company, filed for Chapter 11 bankruptcy this past January.

Bankruptcy court proceedings are occurring in the Northern District of Texas Dallas Division and Yale New Haven Health announced last month that no deal was possible to acquire the hospitals due to “mismanagement.”

Julia Bergman, a spokesman for Gov. Ned Lamont said the “governor believes these hospitals are valuable institutions that provide quality health care to the communities they serve.

“He looks forward to their continued success in the future under a new operator,” she said.

Prospect, which operates Manchester Memorial, Rockville General and Waterbury Hospital, has faced fiscal challenges in many of its hospitals in the state, from delayed payments to physicians and vendors to a shortage of health care providers.

Waterbury Mayor Paul Pernerewski Jr. said he learned that there are several bidders interested and expects to know more in the coming weeks.

He said given what has happened with Waterbury Hospital under the ownership of Prospect, it “would be helpful if the new buyer is not a private equity company.”

There is a call in the legislature to restrict private equity in response to the effect of Prospect Medical Holding’s impact on its three hospitals and state officials have raised concerns about profits being maximized over patient care.

Connecticut lawmakers are considering legislation to restrict private equity’s role in Connecticut hospitals but time is drawing down on the session.

SB 1507 would prohibit private equity companies and real estate investment trusts from acquiring or increasing direct or indirect ownership interest in or operational or financial control over a hospital or health system, according to the bill’s analysis.

Sen. Saud Anwar, Senate chairman of the Public Health Committee, said it is integral to pass legislation.

“We are trying to get everyone on the same page,” he said. “We need to make sure we have a plan to protect our citizens from people who are dedicated to making money for themselves at the cost of patients.”

Prospect

There was hope for a buyer for Prospect’s hospitals in 2022 when Yale New Haven Health agreed in a tentative agreement to purchase Prospect’s three hospitals for $435 million but that deal has been bogged down in lawsuits, with Yale deciding that the deal was not possible.

Dana Marnane, director of public relations and communications for Yale New Haven Health, declined to comment for this article.

Nurses and unions at several of Prospect’s hospitals in the state have told the Courant that their hospitals have been decimated, with some continuing to cite concerns about patient care as they wait for a new owner to purchase the hospitals.

This followed a state Department of Public Health consent order issued in November of last year fining Waterbury Hospital $60,000 for violations of state law and called on the hospital to develop, review and revise policies and procedures related to staffing levels, abuse prevention, implementation of physician orders, timely initiation of Emergency Department triage protocol, among other policies. The consent order also called for an independent expert compliance contractor of the hospital.

Brittany Schaefer, public information officer for the Department of Public Health, said in an email Monday that the consent order remains active.

“The independent expert compliance contractor continues to monitor the items outlined in the consent order and submit monthly reports to DPH and Waterbury Hospital leadership regarding this,” Schaefer said, adding that the contractor also meets regularly with DPH and Waterbury Hospital leadership to discuss reports/items outlined in the consent order.

Bankruptcy court filing shows recently that Prospect Medical received permission to close two Pennsylvania hospitals trying to sell them but no one was interested.

Robert White, distinguished practitioner in residence at Quinnipiac University School of Law, said in an email that Prospect will need an infusion of cash from somewhere soon.

“You may see more closings,” he said. “They are trying to sell assets.”

Meanwhile, the state Office of Health Strategy approved a settlement allowing Prospect to seek approval of the consolidation of the Rockville General and Manchester Memorial hospital licenses from the Department of Public Health.

The settlement also cleared a path for the operator to permanently shutter all services aside from the emergency and behavioral health at Rockville General Hospital in Vernon, The CT Mirror reported.

“This isn’t just a failure – it’s a disgrace,” said Sen. Jeff Gordon, R-Woodstock, in a statement. “Once again, OHS has shown it is completely out of touch with the real health care needs of Connecticut families and seniors.

Quality of care

Ed Gadomski, Connecticut Healthcare Associates internal union organizer, who represents the nurses and technicians at Waterbury Hospital, continues to state that almost all of its departments are understaffed with nursing to patient ratios well over the appropriate levels set by the Hospital Staffing Committee. He continues to wait on the outcome of a complaint he filed with the Department of Public Health charging that the hospital is violating the Hospital Staffing Law.

Suzanne Koenig, president of SakHealthcare and the patient care ombudsman for Prospect’s hospitals, stated in her report, according to court filings, that “overall patient care and safety are being maintained at the ECHN hospitals (Manchester Memorial Hospital and Rockville and Waterbury).

“The ombudsman did not observe any staffing issues that put patients in immediate danger or jeopardized their care,” Koenig said in her report.

She did however report that staffing remains challenging.

“Specifically, MMH and Waterbury have had several registered nurses (each an “RN”) call out sick or no-show,” Koenig said in her report. “The hospitals, however, have done a good job finding replacement RNs for shift coverage, often on short notice. The hospitals are also actively recruiting and offering sign-on and referral bonuses as incentives.”

But Gadomski said he continues to hear of staff members leaving the hospital.

“Morale is non existent,” he said. “We are keeping our heads above water and waiting for the new ownership.”

Koenig noted in her report that the Emergency Department at Waterbury Hospital was crowded and the need for expansion as planned was evident.

Rockville General Hospital must have a 24/7 emergency department and must offer inpatient behavioral health services for three years, according to the agreement.

MANCHESTER, Conn. — Prospect Medical Holdings and the state of Connecticut have come to an agreement that Rockville General and Manchester Memorial hospitals can seek consolidation, but 24/7 emergency services must be made available for the time being.

Los Angeles-based PMH filed for Chapter 11 bankruptcy this past January, leaving residents and hospital staff in northeastern Connecticut anxious over what would become of the area hospitals.

The state Office of Health Strategy on Friday approved the company's request to seek consolidation of the hospital licenses of Rockville General Hospital in Vernon and Manchester Memorial Hospital in Manchester.

Once the licenses are consolidated and the state Dept. of Public Health issues a new license, the Rockville General Hospital campus must have a 24/7 emergency department and must offer inpatient behavioral health services for three years, according to the agreement.

Prospect must also give advance notice to the Office of Health Strategy of any decisions to relocate inpatient beds or relocate outpatient services, and they must be relocated within 30 miles of the Rockville General campus.

The public must also be informed of any service terminations through a circulated newspaper and on Rockville General's website after obtaining the new hospital license.

Prospect must also disclose all potential bidders in the bankruptcy case, and the buyer would take on all responsibilities of the agreement.

Read the full agreement here.

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Yale was a potential buyer of Rockville General and Manchester Memorial last year, but went into litigation with Prospect, and the deal fell through.

Saturday evening, state Sen. Jeff Gordon (R-Woodstock), who represents Vernon, issued a release expressing his disappointment that Prospect is, from his point of view, clearing a path for the operator to permanently shut down all services other than the emergency room and behavioral health center at Rockville General Hospital.

"This decision by Office of Health Strategy Commissioner [Deidre] Gifford once again highlights how out of touch with reality our state government is regarding local health care needs in Connecticut," Gordon said. "It took years before OHS investigated the unauthorized closure of needed patient care services by Prospect Medical Holdings at Rockville General Hospital. Now, it sides with an out-of-state private equity firm that puts profits over patients? Terrible!"

Gordon asked in his release where Gov. Ned Lamont, Attorney General William Tong and Comptroller Sean Scanlon have been during this process.

"The people of Connecticut deserve better than this," Gordon said. "As a state senator and a doctor, I have been fighting for the people of Connecticut. I proposed meaningful reform of certificate of need and OHS, not only to prevent private equity from destroying the hospitals it owns, but also to preserve good paying health care jobs and provide proper oversight."

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