Dive Brief:

• Massachusetts Gov. Maura Healey sent Steward Health Care’s CEO Ralph de la Torre a letter on Tuesday saying Steward has until Friday to deliver overdue financial documents to state regulators.
• Steward should consider selling its seven Massachusetts facilities “as soon as possible,” the letter said. Healey also warned the state’s Department of Health will increase monitoring at Steward facilities.
• The letter comes amid escalating concerns about Steward’s financial viability. The for-profit healthcare network has been accused of missing critical payments to vendors and its landlord, and Steward recently closed facilities in Texas and Massachusetts.

Dive Insight: 

Steward Health Care was formed in 2010 when private equity firm Cerberus Capital Management purchased Caritas Christi Health Care for $895 million. The company says it is the country’s largest private, physician-led healthcare network, with operations in eight states.

Steward has been struggling financially since late last year, and has been scrutinized by politicians at the local and state level. 

Steward has been accused of not paying vendors and potentially harming patient safety. At Steward-owned St. Elizabeth’s Medical Center, a new mother bled to death in October after a tool needed to treat her was repossessed by an unpaid vendor, according to a report from the Boston Globe. 

The Massachusetts Department of Public Health began daily site investigations of some Steward sites on Jan. 31 to ensure patient safety. The DOPH increased its monitoring to include routine visits to all Steward facilities beginning the week of Feb. 18, according to a department spokesperson.

Steward also contracted restructuring advisors in January, according to The Wall Street Journal, fueling speculation about a potential bankruptcy filing.

In Healey’s letter, the governor accused Steward of frustrating state oversight efforts.

“You have represented to us that you are committed to Steward’s patients and the staff who have cared for them over the past 14 years, including throughout the pandemic,” the governor wrote. “But you and your team have not been forthcoming, truthful or responsive about what’s happening with your financial status, operating plans, and contingency strategies.” 

Since Steward’s creation, the operator has fought the state’s financial reporting requirements for hospitals, according to Stuart Altman, former chair of the state’s Health Policy Commission (HPC). Altman told Healthcare Dive that, during his tenure, Steward never produced required financial documents. The operator eventually sued in an effort to dodge the reporting requirement, he said. 

Steward previously wrote in a memo to staff that it had a financing deal lined up to keep its Massachusetts hospitals open, according to a report from WBUR.

However, Steward’s landlord Medical Properties Trust said on an earnings call Wednesday that it is actively pursuing buyers for Steward’s facilities.

A spokesperson for Steward said in a statement this week that the health system has been working closely with state officials, and has provided “extensive financial records as requested.”

“In late 2023 and early 2024, Steward gave regulators in the Commonwealth the audited financial documentation they had requested and is continuing to cooperate closely,” the spokesperson said.

A spokesperson for HPC said Steward’s noncompliance with financial regulations was ongoing as of Feb. 7.