Hospital operator Steward Health Care filed for bankruptcy protection on Monday, but pledged to maintain the eight locations it operates in Florida.
In a press release, company officials said Steward took the step as a necessary measure to allow the company to continue to provide needed care to its patients.
The Dallas-based company filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas.
“Steward does not expect any interruptions in its day-to-day operations, which will continue in the ordinary course throughout the Chapter 11 process,” the company said in a written statement. “Steward’s hospitals, medical centers and physician’s offices are open and continuing to serve patients and the broader community and our commitment to our employees will not change.”
The company is one of the nation’s largest private hospital operators, with 31 locations across eight states.
In Florida, Steward operates Coral Gables Hospital, Hialeah Hospital, North Shore Medical Center and Palmetto General Hospital in Miami-Dade County; Florida Medical Center in Broward; Melbourne Regional Medical Center and Rockledge Regional Medical Center in Brevard; and Sebastian River Medical Center in Indian River.
Steward acquired the Miami-Dade and Broward hospitals from Tenet Healthcare in 2021.
It also has hospitals in Arizona, Arkansas, Louisiana, Massachusetts, Ohio, Pennsylvania and Texas.
Steward’s troubles in Massachusetts have drawn the ire of top political figures including U.S. Sens. Elizabeth Warren and Edward Markey, who have said the company’s previous private equity owners “sold (Steward) for parts” and “walked away with hundreds of millions of dollars.”
Massachusetts Gov. Maura Healey said Monday that the state had been preparing for a possible bankruptcy filing and has established a call center for anyone with questions. Healey was particularly critical of Steward’s management of the hospitals, which she said led to the crisis.
“This situation stems from and is rooted in greed, mismanagement and lack of transparency on the part of Steward leadership in Dallas, Texas,” Healey said at a Monday press conference. “It’s a situation that should never have happened and we’ll be working together to take steps to make sure this never happens again.”
Steward said it is finalizing the terms of “debtor-in-possession financing” from its landlord Medical Properties Trust for initial funding of $75 million and “up to an additional $225 million upon the satisfaction of certain conditions.”
“Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment. Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees, and communities at this time,” Dr. Ralph de la Torre, CEO of Steward said in a press release.
“In the past several months we have secured bridge financing and progressed the sale of our Stewardship Health business in order to help stabilize operations at all of our hospitals. With the delay in closing of the Stewardship Health transaction, Steward was forced to seek alternative methods of bridging its operations,” he added.
He also pointed to what he described as insufficient reimbursement by government payers as a result of decreasing reimbursement rates at a time of skyrocketing costs.
Torre said that by seeking bankruptcy protections, Steward will be better positioned to “responsibly transition ownership of its Massachusetts-based hospitals, keep all of its hospitals open to treat patients, and ensure the continued care and service of our patients and our communities.”
In March, the company announced it had struck a deal to sell its nationwide physician network to Optum, a subsidiary of UnitedHealth Group, as it works to stabilize its finances. But de la Torre’s statement Monday indicated the Optum deal had been delayed.
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