BOSTON (AP) — Steward Health Care said it has reached an agreement to sell its nationwide physicians network to a private equity firm.
The deal comes as Steward is scheduled to go before a bankruptcy court judge Friday on its plan to sell six hospitals in Massachusetts. The Dallas-based company announced its bankruptcy May 6.
In a statement released Monday, Steward said it has entered into a “definitive agreement” to sell its Stewardship Health business — which includes about 5,000 physicians in Massachusetts and nine other states treating about 400,000 patients — to Rural Healthcare Group, an affiliate of Kinderhook Industries LLC, a private equity firm.
Steward said the deal, which is subject to regulators' review, will result in strong patient and physician outcomes. “Stewardship Health will continue to serve its loyal patient following in the commonwealth of Massachusetts under new ownership,” the company said in a statement Monday.
Mark Rich, president of Steward Health Care, said Kinderhook has "over 20 years of experience investing in mid-sized health care businesses that serve the nation’s most vulnerable populations."
Steward had previously announced a deal to sell its physicians network. Steward announced in March that it had signed a letter of intent to sell Stewardship to the Optum unit of health insurer UnitedHealth. That deal was never finalized.
Steward and its CEO Ralph de la Torre have come under intense criticism for a series of decisions that critics — including Gov. Maura Healey — say led to the bankruptcy. Healey said she has focused on trying to save the remaining Steward hospitals, which have found qualified bidders.
“I have spoken repeatedly about my disgust of Ralph de la Torre, disgust of Steward management," the former attorney general said Monday. “I hope the feds go hard after him and he ends up in jail.”
Steward announced its bankruptcy May 6 and two days later said it planned to sell off the 30 hospitals it operates nationwide
A bankruptcy judge last month allowed Steward’s decision to close two Massachusetts hospitals. Steward announced July 26 its plan to close the hospitals — Carney Hospital in Boston and Nashoba Valley Medical Center in Ayer — on or around Aug. 31 because it had received no qualified bids for either facility.
Boston Mayor Michelle Wu said Tuesday that she will use the city’s planning, zoning and permitting process to push to keep some kind of health care resource on the Carney Hospital property — and out of the hands of luxury developers.
“We wanted to be very clear that the zoning here, although it is zoned still as multifamily residential, that does not mean that they would be able to, without going through any process, all of a sudden build a gigantic luxury condo complex that could make them a lot of money," Wu said on WBUR radio station. "So they should not see that as an option on the table."
Steward owes lease payments after selling their hospitals’ physical properties — including land and buildings — to another company. Both Steward and the state have argued that requiring potential buyers to assume those payments instead of negotiating their own leases — or buying the hospitals properties outright — was making it hard to transfer ownership of the hospitals.
Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston last month approved a motion by Steward on Wednesday to toss out the master lease binding the Massachusetts hospitals..
Massachusetts has also agreed to provide about $30 million to help support the operations of six hospitals that Steward Health Care is trying to turn over to new owners. The payments are advances on Medicaid funds that the state owes Steward.
A U.S. Senate committee voted last month to authorize an investigation into Steward’s bankruptcy and to subpoena de la Torre.
Steward currently operates more than 30 hospitals across Arizona, Ohio, Pennsylvania, Arkansas, Florida, Louisiana, Texas and Massachusetts.
Steve Leblanc, The Associated Press
