BOSTON- Health Care Stewardthe struggling health care provider that relied on the backing of private equity investors to quickly acquire dozens of community hospitals, including facilities in Massachusetts, Texas and Florida, announced Monday that she declares bankruptcy.
Steward, who is millions of dollars in debt, said it had “begun a process of judicial restructuring by filing voluntary petitions for relief” under Chapter 11 of the U.S. Bankruptcy Code. She filed the case in the Southern District of Texas.
The Dallas-based company currently has 30 hospitals in eight states, including nine in Massachusetts, where there is a simmering financial crisis. raised concerns about patient safety.
Steward was at the center of a year-and-a-half-long CBS News investigation revealing how private equity investors siphoned off hundreds of millions of dollars community hospitals with devastating consequences for public health. Records reviewed by CBS News showed that Steward hospitals across the country had a trail of unpaid bills, sometimes at risk of running out of potentially life-saving supplies.
Last year, CBS News discovered that Steward embezzled money from hospital operations by sell the real estate of the Texas Vista Medical Center in San Antonio before completely closing the establishment.
The company’s bankruptcy filing lists 30 creditors owed a total of more than $500 million, including the U.S. government, which owes the federal government more than $32 million in reimbursement for insurance overpayments .
Experts tell CBS News that Steward’s debts are likely much higher and when the dust settles, it could be one of the largest hospital bankruptcies in U.S. history. In a statement, the company said it was counting on its owner, Medical Properties Trust, to provide sufficient financing to allow its hospitals to continue operating even in the event of bankruptcy.
“The Company is finalizing terms for debtor-in-possession financing with Medical Properties Trust for an initial financing of $75 million and up to an additional $225 million subject to the satisfaction of certain conditions acceptable to Medical Properties Trust,” Steward said in a statement.
No daily impact expected, according to Steward Health Care
The company said declaring bankruptcy allows it to “continue providing necessary care to its patients in their communities without interruption.”
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