RIDOH orders Fatima, Roger Williams Hospital owner to stabilize facilities’ finances

PROVIDENCE, R.I. (WLNE) — The Rhode Island Department of Health issued an immediate compliance order Thursday requiring the owners of Roger Williams Medical Center and Our Lady of Fatima Hospital to ensure health services and care at the facilities can continue.

The order was issued to Prospect Medical Holdings.

RIDOH said that the company’s underfunding of the hospitals was affecting operations, and pointed to the fact that in October 19 elective surgeries were canceled due to lack of proper equipment and supplies.

The order requires the company to hire an independent fiscal monitor and cover all operating costs of the hospitals, as well as create a “cash on hand escrow account to ensure the stability of the facilities.”

“While Rhode Island law requires hospitals to maintain local governing bodies, much of the financial decision-making for these two hospitals happens in California,” RIDOH said in a statement announcing the order. “Prospect Medical Holdings sweeps all patient care revenue from Roger Williams and Fatima every day and then returns an operating allowance back to the hospitals once a week. The amounts of these allowances vary and are determined by Prospect Medical Holdings.”

The department added that an investigation reveled that more than 250 of the hospitals’ approximately 830 vendors were operating with the hospitals on a “cash on demand” basis, which means they will not deliver supplies unless paid at the time of delivery.

“The amounts of these allowances are inadequate to pay vendors in a timely manner, leading to interruptions in services,” the department said.

The order also gives RIDOH the right to order a cease and desist on the daily sweeping of patient care revenue from the hospitals to the parent company in California.