History of Financial Failure of CharterCARE Hospitals - Underfunded and Financial Schemes

2014

Prospect Medical Holdings Buys CharterCARE

Prospect Medical Holdings acquired CharterCARE Health Partners in 2014. The acquisition, which turned the previously non-profit hospitals (Roger Williams Medical Center and Our Lady of Fatima Hospital) into for-profit entities, was finalized following approval from the Rhode Island Attorney General on May 16, 2014. 

Finance guru Same Lee, CEO of Prospect (see photo), created the now bankrupt scheme.

2014

Attorney General Approves Sale and Pension Deal

At the time of the sales agreement in 2014, Rhode Island Attorney General Peter Kilmartin said, “The transacting parties have worked diligently to provide regulators with the necessary documentation and information throughout this review process to make this decision, a decision I believe is in the best interest of Rhode Island’s healthcare marketplace, the community, the employees, and most importantly, the patients.”

Kilmartin said in his statement, “Conducting a hospital conversion review requires the commitment of a substantial amount of resources for the Office of Attorney General. I commend my staff for the time and careful consideration put into this review process.” 

2017

St. Joseph Pension Fund Files for Receivership

In August of 2017, GoLocalProv broke the story of the biggest pension failure in the history of Rhode Island.

The pension fund was "orphaned" when CharterCARE was sold to Prospect Medical Holding.

The receivership was an early sign of the disastrous financial management of the CharterCARE system.

2008-2017

$50 Million Deficit Before Sale to Prospect — $100 Million Plus in Unpaid Pension Payments

The pension fund of St. Joseph Health Services was underfunded by the Diocese of Providence for many years prior to the sale of the hospital to CharterCARE in 2014, GoLocalProv reported in 2017.

The Diocese of Providence failed to make proper contributions, and retirees were never told of the shortfalls.  While records are incomplete, it is clear that between 2008 and the time of the sale of the hospital in 2014, the Diocese repeatedly underfunded retirement payments or made no payment, according to Stephen Del Sesto, the court-appointed receiver.

It is unclear how many years before 2008 the failure to make payments and partial payments goes back. Repeated efforts to reach the Diocese for comment have gone unanswered.

The bankruptcy of the pension fund impacts 2,800 and is the largest failure in Rhode Island history. The pension fund has a deficit of more than $160 million.

"The Catholic Church and Diocese of Providence should be ashamed of themselves," said former Rhode Island Attorney General Arlene Violet in an interview with GoLocal in 2017.

When St. Joseph was sold, the hospital was in financial free fall. According to financial documents of St. Joseph, in 2013, it began the year with nearly a $50 million deficit and ended the year with a $79.4 million deficit.

But, by 2014 as the sale was being executed, the shortfall of the St. Joseph company was ballooning — the deficit between assets and liabilities grew from $79.4 million to more than $132 million.

In 2014, IRS documents secured by GoLocalProv unveiled that the fund was orphaned only with the approval of Rhode Island Attorney General Peter Kilmartin.

2020-2024

Prospect and Leonard Green Make Hundreds of Millions

While the hospitals fell into decay, CharterCARE's parent company, Prospect Medical Holdings and its private equity partner Leonard Green scored hundreds of millions.

"Leonard Green pocketed over $658 billion dollars across its network of hospitals in four states. The repercussions are tangible: once-reliable hospitals have seen critical services shuttered, staff laid off, patient abuse allegations, and declining quality of care," according to a report in The Flaw.

2020

WSJ Raises Questions About CharterCARE’s Parent Co. Finances, Battle Heats Up in RI

A GoLocal report in December of 2020 outlined the pending financial storm:

"In 2017, GoLocal unveiled the collapse of the pension fund of St. Joseph Hospital and since then, there have been three-plus years of litigation to recover assets from a host of business entities including the parent company of CharterCARE, Prospect Medical Holdings, and the Diocese of Providence. 

Now, a financing structure by Prospect and the private equity firm Leonard Green which has a majority stake in the hospital group is drawing the attention of regulators and the media.

Presently, Prospect is seeking a hospital conversion approval in Rhode Island. 

The Rhode Island Office of the Attorney General and the Rhode Island Department of Health have received the initial applications for a hospital conversion filed by a plethora of corporate entities tied to the change in control — a change that could mean millions in payouts for Prospect executives and its pension funds — the intertwined entities include — Chamber Inc.; Ivy Holdings Inc.; Ivy Intermediate Holdings, Inc.; Prospect Medical Holdings, Inc.; Prospect East Holdings, Inc.; Prospect East Hospital Advisory Services, LLC; Prospect CharterCARE, LLC; Prospect CharterCARE SJHSRI, LLC; Prospect CharterCARE RWMC, LLC.

In Rhode IsIand, hospital conversions must be approved by the RIDOH and the Attorney General. Both offices approved the plan and the financing structure that lead to the failure of the St. Joseph pension fund -- now underfunded by an estimated $100 million and in receivership.

A Wall Street Journal report is raising questions about the controversial debt-financed dividend payout structure being used by Prospect and Leonard Green.

The Wall Street Journal is reporting that “Over the last decade, Prospect paid its shareholders, the biggest of which is Leonard Green, more than $500 million in dividends from these hospitals, while loading Prospect’s balance sheet with new debt, according to a debt prospectus and Moody’s.”

2021

Neronha Secures $80M Guarantee From Owners of Fatima and Roger Williams After Demanding $150M

GoLocal reported in June of 2021:

"Rhode Island Attorney General Peter F. Neronha announced on Tuesday that his office issued a decision, pursuant to its authority under Rhode Island’s Hospital Conversions Act, to conditionally approve a transaction that would allow a change in ownership of two local hospitals, Roger Williams and Our Lady of Fatima Hospitals.

As part of the deal between Neronha’s office and Prospect Medical Holdings (Prospect/PMH)— the ownership group will put $80 million in escrow to support the hospitals over the next five years.

Initially, Neronha had demanded $150 million, and Prospect said the demand was unreasonable and threatened to close the two hospitals.

Then, Prospect filed an emergency Temporary Restraining Order against Neronha in Providence Superior Court."

2022

CharterCare to be Sold - Deal Includes Roger Williams and Fatima Hospitals

As GoLocal reported in 2022, "CharterCare, Rhode Island's third-largest healthcare group, is being sold."

GoLocal wrote:

"The existing ownership Prospect Medical Holdings presently owns and operates Roger Williams and Our Lady of Fatima hospitals and a range of other healthcare interests in Rhode Island.

The Centurion Foundation (Centurion) and Prospect announced Tuesday they have signed an Asset Purchase Agreement (APA) for Centurion to acquire the CharterCARE Health Partners (CCHP) system from Prospect. Centurion also announced that QHR Health will assist in the transition process and will provide ongoing consulting support to CharterCARE senior management and board of directors.

The agreement also includes CharterCARE’s related businesses, real estate assets, physician clinic operations and outpatient services, and it is subject to customary regulatory approvals, including reviews by the Rhode Island Department of Health and the Rhode Island Attorney General.

Under the APA, Centurion will purchase the assets and operations associated with the following hospitals and ancillary services that comprise CharterCARE:

•          Roger Williams Medical Center in Providence, RI

•          Our Lady of Fatima Hospital in North Providence, RI

•          Blackstone Valley Surgicare in Johnston, RI 

•          CharterCARE Medical Associates in Providence, RI

•          CharterCARE Home Health Services in Providence, RI

•          Roger Williams Cancer Center in Providence, RI

•          Southern New England Rehabilitation Center in North Providence, RI

•          St. Joseph Health & Dental Center in Providence, RI"

2023

Prospect Buyer Has Just One Full-Time Employee

A GoLocal investigation in 2023 found that the proposed buyer, The Centurion Foundation (Centurion), a Georgia-based non-profit, had just one full-time employee, according to the Foundation’s most recent tax documents.

GoLocal reported:

"Centurion’s Partner Is Out.

When the deal was announced, Centurion was making the deal in partnership with QHR Health, but GoLocal has learned that QHR is now out of the deal.

Otis Brown of CharterCARE confirmed the players on the Centurion team.

'No implications to our strategic and operational directions. Their initial consulting work was completed and we needed different types of consultants. Some of that work has already been redistributed to other consulting firms,' said Brown.

Earlier this month, the Rhode Island Department of Health (RIDOH) and the Attorney General’s office announced the application was 'complete' and the formal review process would begin.

How Would a Company with One Employee Run the Hospital System?

According to tax documents, Centurion has just one full-time employee — Ben Mingle, the president — who receives $430,094 in compensation.

Greg Grove is listed as the CEO, receives a compensation package of $123,412, and serves as a director as well — he is believed to be part-time. 

'Centurion looks forward to the formal review process and sharing its operational plans for success. They have spent considerable time with the local management team to develop confidence in their abilities to execute the business plan,' said Brown.

Centurion says about itself, 'We specialize in meeting community needs and navigating complex situations which leverage our expertise in real estate, operations, and finance. Our principals have completed over 100 financings across the nation creating hundreds of millions in savings for the communities and clients we serve.'

Financial Troubles

On November 9, RIDOH issued an Immediate Compliance Order requiring Prospect Medical Holdings of California — owner of Roger Williams Medical Center and Our Lady of Fatima Hospital — to ensure the continuity of health services and care at the facilities by acting immediately to stabilize the two facilities financially. 

According to the department, bills for supplies are going unpaid, and a result, nearly 20 surgeries had to be cancelled in October.

This Immediate Compliance Order was issued to Prospect Medical Holdings and related entities after a thorough, extensive review by RIDOH determined that Prospect’s underfunding of the hospitals is impacting operations.

A RIDOH investigation revealed that, as of October 24, more than 250 of the hospitals’ approximately 830 vendors were operating with the hospitals on a 'cash on demand' basis. This means they only deliver supplies if they are paid at the time of delivery. This is generally reserved for payors with a history of non-payment. The average time it takes the hospitals to pay bills (“days payable outstanding,” or DPO), was in excess of the 90-day limit set when the acquisition of the facilities was approved in 2021. 

Unpaid vendors have included suppliers of hip joints, catheters, endoscopes, and eye lenses. The procedures that were canceled included endoscopies, eye surgeries, and a spinal surgery. There is no indication that issues with vendors ever prevented emergency procedures from being performed."

2024

Neronha Approves Sale of CharterCARE to Centurion, Nurses Criticize Approval

GoLocal reported:

"On June 20, 2024, Rhode Island Attorney General Peter Neronha and the Rhode Island Department of Health gave the green light for CharterCARE hospitals to be sold by Prospect Medical Holdings to Georgia-based Centurion.

The United Nurses and Allied Professionals (UNAP), the union representing almost 1,200 employees at Our Lady of Fatima Hospital, Roger Williams Medical Center, and Prospect Home Health and Hospice, issued a highly critical statement in response to Neronha’s and RDOH's decision to accept, with conditions, Centurion Foundation’s bid to buy Prospect CharterCare’s Rhode Island healthcare facilities. 

UNAP said the following:

'The conditions set forth in the decision are not nearly enough to ensure the long-term viability of CharterCare’s hospitals and healthcare facilities. Centurion does not have to put up a meaningful amount of their own capital, and the entire transaction relies on saddling these hospitals with more and more debt – to the tune of hundreds of millions of dollars. When you consider the fact that CharterCare’s hospitals and healthcare facilities are losing tens of millions of dollars in operating costs every year, the decision makes even less sense. 

Since Centurion submitted their application, we have loudly and consistently sounded the alarm about their business model. The math simply does not work without them putting a meaningful amount of their own skin in the game. Our union is disappointed in this decision. Coming on the heels of Prospect’s disastrous ownership of these important community hospitals and healthcare facilities, you would think these conditions would have been much, much stronger. Clearly, that is not what has happened – and the long-term success of Our Lady of Fatima Hospital, Roger Williams Medical Center, and Prospect Home Health and Hospice remains at great risk.'"

2025

Nurses Warn Closure of Roger Williams and Fatima Would Be “Catastrophic”

In January of 2025, the nurses' union blasted the sale to Centurion:

"The United Nurses and Allied Professionals (UNAP) is calling on state leaders to immediately take action to ensure the continued viability of the CharterCARE hospitals in Rhode Island owned by Prospect Medical Holdings.

UNAP represents almost 1,000 employees at Our Lady of Fatima Hospital, Roger Williams Medical Center, and Prospect Home Health and Hospice.

Lynn Blais, R.N., President of UNAP and a registered nurse at Fatima Hospital, stated, 'It will be an all out catastrophe for Rhode Island’s health care system if Prospect shutters these important community hospitals and health care facilities. Our system doesn’t have the capacity to treat the patients who would be displaced in the event of closure, and Rhode Island’s other hospitals would be completely overwhelmed with a flood of new patients.'

'Hundreds of nurses and other health professionals would lose their jobs. That’s why we are calling on state leaders – the Governor, the Senate President, and the Speaker of the House – to immediately come up with a plan to keep Our Lady of Fatima Hospital, Roger Williams Medical Center, and Prospect Home Health and Hospice open and operational regardless of what happens with this bankruptcy. And we’re calling on Prospect to do right by Rhode Island and keep these facilities open until the sale to Centurion Foundation is final. Our union will do all we can to secure the future of these healthcare facilities, ensure we protect these jobs, and continue providing critical care for the families who depend on them,' Blais added."

2025

Prospect Files Bankruptcy

On Sunday, January 12, 2025, GoLocalProv's News Team reported:

"Prospect Medical Holdings, which owns CharterCARE and operates Roger Williams and Fatima hospitals in Rhode Island, has filed for bankruptcy.

The filing throws the proposed sale of the two Rhode Island hospitals and other assets into question.

In an initial filing seeking Chapter 11 protections filed Saturday night, Prospect, which also owns facilities in California, Pennsylvania, and Connecticut, listed debts of more than $400 million.

In a press release announcing its restructuring, the company said it would continue to operate as normal.

'Throughout the Chapter 11 process, Prospect Holdings' hospitals, medical centers, and physicians' offices will remain open, and patient care and services will continue uninterrupted,' the company wrote. 

President of the Senate Dominick J. Ruggerio said, 'I have been in regular contact with the Attorney General and state regulators regarding this issue, and we continue to closely monitor developments. This bankruptcy filing is not unanticipated. My highest priority continues to be the continuity of health services provided at Fatima and Roger Williams hospitals. I’m very grateful to the Attorney General for his strong leadership, his preparation for every eventuality, and his ongoing diligence as we work towards our shared goal of a transfer of these hospitals to a responsible new owner.'

But that transfer has not taken place as the company seeking to buy the two Rhode Island hospitals seeks financing.

The Rhode Island hospitals both pay millions of dollars in taxes and are among the largest taxpayers for Providence and North Providence.

The two Rhode Island hospitals were to be sold to a Georgia-based company."

2025

Massive Losses and Seeking $165 Million in Bonds

As GoLocal reported in April of 2025:

"The Rhode Island Health and Educational Building Corporation (RIHEBC) moved forward on Thursday with $165 million in bonds to finance the sale of the bankrupt CharterCARE hospital group.

The claim is that financing is necessary for the sale of the hospitals ot the Atlanta-based non-profit Centurion.

The total cost of the bonds with debt service exceeds $400 million.

CharterCARE operates Roger Williams and Fatima Hospitals. And according to financial documents, CharterCare has lost more than $130 million over the past five years of available financials — 2019 to 2023.

In 2023, CharterCARE lost $60 million alone.

And, according to financials presented in the next four years CharterCARE is expected to lose another $69 million.

Despite the financial situation, RIHEBC’s board voted 4-1 for the massive bond package.

Specifically, they approved $165,000,000, consisting of approximately $97,500,000 in tax-exempt bonds and approximately $67,500,000 in taxable bonds, and with financing and associated fees, the total amount balloons to more than $400,000,000 with debt payments over 30 years."

2025

S&P Issues “Negative Outlook”

GoLocal reported in April of 2025:

"S&P rates the bonds BB- and gives a negative outlook.

According to the guidance provided by S&P, 'We have incorporated these risks into our rating partly through the negative outlook, reflecting a one-in-three chance of a rating downgrade within our one-year outlook period. The negative outlook reflects our view of the outsized uncertainty about future operating performance, given the complexity involved in converting from a for-profit provider under a bankrupt operator to an independent nonprofit provider. We view the turnaround plan as promising, and we recognize the hospital's long history in the market, but also believe that there will be unforeseen industry challenges that could slow progress.'

'A lower rating could be possible if CharterCARE is unable to largely meet forecast expectations during the outlook period or with any meaningful change to the enterprise profile, including a negative shift in market share because of an inability to grow volumes. Our expectations include break-even-to-slightly positive operating performance by 2027, as well as maintenance of key balance-sheet metrics around leverage and unrestricted reserves that are generally in line with levels posted on the opening balance sheet. We do not view CharterCARE as having any capacity for additional debt,' writes S&P.

A "BB-" bond rating signifies a bond issuer is considered to have speculative credit quality with a slightly increased default risk, meaning the issuer's ability to meet its financial obligations is vulnerable to adverse economic conditions, but with some financial flexibility."

2025

Centurion Fails to Sell Bonds

The bond package to finance Centurion's purchase of the CharterCARE hospital repeatedly failed even after multiple restructurings.

2025

Prime As Potential Buyer Bowed Out

In November of 2025, GoLocal broke the story of the potential of Prime Healthcare Foundation being a suitor to purchase the CharterCARE hospitals.

But just a month later, Prime withdrew.

GoLocal reported:

"GoLocal has learned that Prime Healthcare Foundation has withdrawn as a potential bidder to rescue the bankrupt CharterCARE hospitals.

This leaves the financially fragile Centurion as the only potential bidder, but the Georgia non-profit has been unable to close financing in the past 10 months."

2026

CharterCARE in Peril: Centurion Misses Deadline, Makes Demand for State Funding

On January 18, 2026 GoLocal reported:

"This past week, Centurion Foundation, an Atlanta-based non-profit that has never operated a hospital, missed the deadline to close the purchase of bankrupt CharterCARE — which was January 15.

The fate of the CharterCARE hospitals — Roger Williams and Fatima — is now even more confused.

Centurion has failed to close on more than $150 million in bonds for the past eleven months.

Rhode Island Attorney General Peter Neronha told GoLocal on Saturday, “I can’t comment on their financing status, but this Bankruptcy Court Order required Centurion to close by January 15. They did not. The Order describes what happens next.”

'Centurion is free to continue to try to close but we now have work to do and a deadline by which to do it, which my Office is working hard on in consultation with other state leaders and I expect you will hear more about that next week,' Neronha added.

Demanding State Support

Centurion has repeatedly claimed it was close to finalizing bond financing. But each time, investors rejected the deal.

On Friday night, Centurion’s CEO Ben Mingle sent a letter to state leaders and other involved parties claiming the company could secure some of the financing — about $85 million — conditional on the state providing $18 million in financing.

Mingle wrote, 'I am pleased to inform you that we have secured verbal commitments from four (4) investors at an aggregate amount sufficient to facilitate the closing of our proposed acquisition of Roger Williams Medical Center and Our Lady of Fatima Hospital (and related assets) from Prospect Medical Holdings in accordance with state requirements. As a result of this development, we are now working with those investors to engage purchaser’s counsel and will be formalizing bond purchase agreements with each investor.'

'Each investor has clearly stated that their investment is subject to, and conditioned upon, having a state-funded bond reserve fund in the amount of $18 million. Centurion Foundation respectfully requests that legislation be introduced at the earliest possible time to allow for the approval and implementation of this bond reserve fund. Subject to the timing of enactment of the legislation establishing and funding the bond reserve fund, Centurion is working diligently to close this transaction not later than February 28, 2026,' added Mingle.

The total amount Centurion is trying to close is far less than the $150 million. GoLocal is told the number is less than $90 million.

There have been no public statements from state leaders in response to Mingle’s claims and demands.

Next Step

The fate of the CharterCARE hospitals and their approximately 2,000 employees may get some clarification on Wednesday in a hearing before Chief Judge Stacey Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas.

Prospect Medical Holdings, the owners of CharterCARE hospitals, petitioned Jernigan this past fall to close the hospitals or for the State of Rhode Island to take them over.

The McKee administration has not filed with the bankruptcy court to take control of the hospitals, and McKee did not include any funding for a CharterCARE bailout in the budget."