Steward Demands $1.5M from Pa. or Will Close Sharon Hospital

SHARON, Pa. – The Pennsylvania attorney general said Steward Health Care Services is demanding “interim emergency funding” to keep Sharon Regional Medical Center from being closed.

In a bankruptcy court notice filed late Thursday morning, Steward is quoted as threatening, “We require $1.5 million from Pennsylvania by Friday August 23, 2024 – or we will send a closure notice.”

Steward said it’s being pressured by lenders who are “demanding hospitals be closed immediately. The demand for funding [by Steward] is heavy handed and seeks to exploit the situation of the damages that ensure when a closure notice is sent,” the notice states.

The attorney general has been working with Meadville Medical Center to acquire the Sharon hospital. A letter of intent was submitted by MMC to Steward on Aug. 16. “Funding has been preliminarily ‘worked out’ and this important news was communicated to [Steward] the weekend of Aug. 17,” the document states.

“This is all good news,” it continues. “However, having been advised funding for MMC to acquire Sharon hospital has been possibly sourced, [Steward is] now seeking to be ‘gifted’ funds from Pennsylvania on an emergency basis or they will still close the hospital.”

The court notice credits state Sen. Michele Brooks, R-50th, for spearheading efforts to secure the funding for MMC’s acquisition.

It goes on to call Steward’s “conduct egregious. The Sharon Hospital property has been badly neglected by the Debtors. It needs an enormous amount of deferred maintenance due to the Debtors’ gross neglect, incompetence, and mismanagement.”

A hearing is scheduled for Thursday afternoon before U.S. Judge Christopher Lopez. Numerous disputed matters are on the agenda, including the situation at Sharon Regional Medical Center.

Pennsylvania Chief Assistant Attorney General James A. Donahue III is poised to present evidence at the hearing.

Pennsylvania law requires that the Pennsylvania Department of Health be provided at least a 90-day notice of an operator’s intent to close a hospital, and the health department must approve any closure plan.

The attorney general is asking the court to grant a 60-day time period “to allow Pennsylvania sufficient time to obtain funding for Meadville Medical Center and then proceed to close the transaction.”

The court document says the commonwealth may well agree to provide Steward $1.5 million in interim funding but not until the company provides a “60 to 90 day go-forward budget for Sharon hospital.” This information would then be presented to “other agencies of the commonwealth to determine if funding can be obtained.”

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