Local Group Files Objection to Sept. 20 Closure of Trumbull Hospitals
YOUNGSTOWN, Ohio – An attorney for local government entities and Warren City Hospital Inc., the organization seeking to stop the closure of the Steward Health Care System hospitals and medical offices in Trumbull County, is requesting at least 15 days to submit a bid and a two-month extension of the hospital closure deadline.
The objection to the closure of Trumbull Regional Medical Center in Warren and Hillside Rehabilitation Hospital in Howland was filed Tuesday in the U.S. Bankruptcy Court in Houston.
The filing states that closing the Ohio hospitals Sept. 20 “will certainly prejudice the health care needs of Ohio patients and the community within which the hospitals operate and their closures will create an irreparable harm to the rural areas of this community as there are no other hospitals in the near vicinity.”
The filing came just hours after Judge Christopher M. Lopez approved the representation of the city of Warren, Trumbull County and Western Reserve Health Education Inc. by Duriya Dhinojwala, an attorney from Akron who filed the objection.
Steward declared Chapter 11 bankruptcy May 6 and filed a notice Aug. 21 that stated it would close the Trumbull hospitals by Sept. 20. The hospitals continue to see and treat patients.
The objection asks Lopez to extend the closure date to Nov. 20, which could give the parties sufficient time to raise $30 million to operate the hospitals.
At the start of a hearing Tuesday morning that focused on the sale of hospitals in Massachusetts, an attorney for Steward reported some progress has been made related to the “non-Massachusetts hospitals.”
Without mentioning them by name, the attorney’s description matches the three hospitals that Steward operates in the Mahoning and Shenango valleys, which are clustered with the Massachusetts hospitals in what Steward designated as “first round hospitals” to be sold or closed.
Meanwhile, the commonwealth of Pennsylvania has been given a deadline of close of business Aug. 30 to arrange $1.5 million in interim financing to prevent Steward from issuing a closure notice for Sharon Regional Medical Center in Sharon, Pa.
The nonprofit Western Reserve Health Education, which provides residency and fellowship programs for graduate students, joined the objection. It is funded through the Centers for Medicare and Medicaid, as well as the Ohio Department of Medicaid. Funding for those programs was renewed by Steward on May 28, which allowed them to continue and receive government funding. But Steward has stopped paying teaching services and vendors involved in the program, according to WRHE. The nonpayment of faculty at Trumbull Regional caused some to threaten resignation.
The court filing says the 21-day time period to submit bids for the Trumbull hospitals was insufficient, and potential bidders “were hindered” by conditions “that led to a negotiation impasse.”
Medical Properties Trust, the owner of the hospitals’ real estate, and Cain Brothers, a division of KeyBanc Capital Markets Inc., retained to sell the hospitals, and Steward created many burdensome requirements, making the 21-day time frame unworkable, according to court papers.
After selling the hospital properties to MPT, Steward was paying rent to the company yet both let the facilities deteriorate “from millions of dollars of deferred maintenance.”
The document notes the failure by MPT to maintain its property should reduce the hospital valuation, and the fragmentation of assets – sale of real estate, working capital, physicians, outpatient laboratory and other assets – makes it difficult for interested bidders to determine fair value.
A visit to Trumbull Regional in late June by the court-appointed patient ombudsman found multiple elevators were out of order, a dishwasher was incapable of sanitizing because it did not heat properly and other kitchen equipment was broken. Equipment that could not be replaced at Hillside was being rented, the ombudsman added.
The objection says MPT and Cain Brothers were requiring prospective bidders to resolve issues with the other party, before resolving with them, causing a “catch 22 situation” that blocked resolution.
Moreover, the filing accuses Steward, MPT and the Cain Brothers of not fully complying with the court bidding procedures or state regulatory agencies before issuing a notice of closure. And they have failed to disclose if there were any bids or qualified bidders for the hospitals.
Also included in the closure objection are the Steward Health Center facility in Elm Road Medical Park in Cortland and Austintown Medical Park.
If the hospitals and satellite medical facilities close, it’s estimated that 950 employees will lose their jobs and the city of Warren will lose $1.4 million in annual income tax revenue.
American Federation of State County & Municipal Employees Local 8 has organized a rally in support of the effort to save Trumbull Regional and Hillside.
According to the union’s Facebook page, the rally will be held at 7 p.m. Thursday at the intersection of Market Street and Homewood Avenue, which is the eastern corner of the Warren hospital’s property.
AFSCME represents about 800 of the employees at Trumbull Regional and Hillside.
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