Steward Demands $3M to Stop Today’s Closing Notice for Sharon Hospital
SHARON, Pa. – The Pennsylvania attorney general is seeking a 14-day extension that would stop Steward Health Care System from executing today’s scheduled closing notice for Sharon Regional Medical Center.
In documents filed late Sunday in U.S. Bankruptcy Court in Houston, Attorney General Michelle Henry said Steward is demanding that the commonwealth come up with $3 million to fund the hospital’s losses and keep it open through December – double the $1.5 million monthly subsidy it had been paying.
The demand was transmitted Wednesday during a telephone call placed minutes before the close of business for the Thanksgiving holiday, court papers say.
“This is very troubling. And it is unreasonable. It is simply impossible for Pennsylvania to agree to the debtors’ demand by [Monday] morning,” the filing states. “In effect, it is a negative notice demand for another $1.5 million, or “we start the process to shut down the hospital.”
The attorney general is asking U.S. Judge Christopher Lopez to conduct an emergency hearing today, “at the court’s earliest possible available time,” and grant a 14-day “continuance of [the closing] notice deadline.”
The Dec. 2 deadline was set weeks ago as Steward, the attorney general and the operators of Meadville Medical Center were negotiating the sale of the hospital to Meadville. “Pennsylvania is far along in negotiation with various parties” to keep the hospital “open and operating so that it can be sold to a neighboring community hospital,” the attorney general stated.
“These efforts have included Pennsylvania funding $4.5 million between September and November 2024, to cover operating losses” at the hospital.
The attorney general said it did not receive documentation to support the $3 million funding request until Friday at 4:30 p.m.
On Aug. 16, Meadville Medical Center sent Steward a letter of intent to acquire the hospital, contingent on financial support from various third parties and the commonwealth.
Negotiations followed with Medical Properties Trust, which owns the real estate on which the Sharon hospital operates, for the sale of those properties to Meadville. “No agreement has yet been reached,” the attorney general said, but it “anticipates reaching a resolution with MPT in the near future.”
Characterizing the real estate negotiations as “slow at first,” the attorney general recently filed a lawsuit against MPT in Mercer County, Pa. This lawsuit claims “the sale of the real estate on which Sharon sits violated the court order approving the sale of Sharon’s non-profit charitable assets to the prior for-profit operator before Steward acquired the hospital. The commonwealth is seeking to have the real estate returned to the original charitable foundation.”
A hearing is set for Dec. 6 to “show cause why Pennsylvania’s petition should not be granted.”
Negotiations with Meadville Medical Center are at the point where the form of the asset purchase agreement is being discussed, court papers say.
But as of late Sunday, the attorney general’s office was unable to reach anyone at the Legislature or the governor’s office who could authorize and supply the $3 million payment demanded by Steward.
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