Update: Interim Financing Secured, Proposal Submitted to Keep Trumbull Hospital Open

Editor’s note: This story has been updated to include new bankruptcy court filings.

WARREN, Ohio – Western Reserve Health Education Inc., the nonprofit provider of graduate medical education at Trumbull Regional Medical Center, says it submitted a proposal Aug. 28 to Steward Health Care System to buy the hospital and it has secured $20.5 million in interim financing for Steward to continue operations until WRHE takes ownership.

In court papers filed late Thursday, WRHE said it is “awaiting a response” from Steward. Terms of the purchase proposal were not disclosed.

The disclosure of interim financing and the purchase proposal are contained in an emergency amended joint objection to the scheduled Sept. 20 closure of the hospital. Joining WRHE are Warren City Hospital Inc., the city of Warren and Trumbull County. The emergency objection seeks a hearing “no later than Sept. 3 at 10 a.m.” before Judge Christopher Lopez in U.S. Bankruptcy Court in Houston.

The document restates the arguments presented in the original objection filed Tuesday, which sought 15 days to submit a bid to Steward “and/or extend the time of the Sept. 20 closure to Nov. 20.”  Both the original and the emergency amended objections mention Hillside Rehabilitation Hospital. But Hillside is not included in the purchase proposal submitted Wednesday by WRHE to Steward.

In seeking an emergency hearing by 10 a.m. Sept. 3, WRHE said it was notified Thursday by the Accreditation Council for Graduate Medical Education that its accreditation was in jeopardy based on the imminent closure of the Trumbull hospital and that “a decision would be made no later than Sept. 4.”  

Without an extension of the hospital closure date to Nov. 20, “WRHE faces an almost certain loss of its accreditation, and its memorandum of understanding and proposed asset purchase agreement would be rendered moot,” court papers say.

Filed as an exhibit with the emergency objection is the MOU that “memorializes the mutual understandings of the parties with respect to the transition of medical services” related to the Trumbull hospital and its satellite medical facilities in Austintown, Cortland and Hubbard.

The MOU has two signature lines, one signed by the president of WRHE and the other for Steward Health Care System to sign.

According to the document, WRHE has secured funding in the following amounts and from the following sources:

• $3 million grant from the city of Warren.
• $3 million grant from Trumbull County.
• $6 million loan from 717 Credit Union.
• $1 million in public donations.
• $2.5 million grant from the state of Ohio.
• $5 million loan from Huntington National Bank.

The exhibit says once the MOU is executed and an asset purchase agreement entered, WRHE will deposit “$9 million into an escrow account with a financial institution and provide proof of the deposit to Steward.”

WRHE or its “appointed manager or designated affiliate” will use funds in the account to pay all operating expenses related to the Trumbull hospital and its affiliates until the change in ownership is approved by bankruptcy court and government entities.

Accordingly, Steward would maintain existing operations and not stop providing care at any of the Trumbull hospital facilities, including admissions to its emergency room.

A hearing is already scheduled to take place at 10 a.m. Central Time on Sept. 4. Only on the agenda as of this posting is the approval of bids for Steward hospitals in Massachusetts.

Update: Support from Ohio AG, Labor Unions

On Friday, the office of Ohio Attorney General Dave Yost filed a response to the emergency amended joint objection in support of Warren City Hospital Inc., Western Reserve Health Education Inc., the city of Warren and Trumbull County and their request that the scheduled closures of Trumbull and Hillside hospitals be delayed until Nov. 20.

The attorney general is an interested party in keeping the hospitals open, the response states, “as his role is to protect the physical and financial wellbeing of Ohioans.”

According to the filing, “In the past five fiscal years, the actual Medicaid dollars Ohio has expended to the two facilities has been substantial, demonstrating the vital services provided to the area residents, which need to continue.”

The document lists Medicaid expenditures for patient care at Trumbull and Hillside. The figures show state reimbursements essentially doubled in 2021 compared to 2020. In fiscal 2023, Trumbull Regional Medical Center received $24.3 million in Medicaid payments from the state; Hillside Rehabilitation Hospital received $3.7 million, the attorney general said.

Late Friday the labor unions that represent certain employee classifications at Trumbull and Hillside hospitals told the court that they, too, want the closure dates delayed until Nov. 20.

In this court filing, AFSCME Ohio Council 8 and SEIU District 1199 endorse Western Reserve Health Education Inc.’s proposed asset purchase agreement for Trumbull hospital and the $20.5 million in interim operating financing that has been raised.

“In light of these positive developments, the requested extensions of time to submit a bid and/or the closure date to accommodate a transaction … are not only appropriate in these circumstances, but vital to the community,” the document states.

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