McKee Looking to Scoop Opioid Settlement Money to Fund CharterCARE Bailout

McKee Looking to Scoop Opioid Settlement Money to Fund CharterCARE Bailout

There is a new major twist in the effort to finance the sale of CharterCARE to a Georgia-based not-for-profit. The acquiring company, Centurion, has never operated a hospital.

The effort to sell bonds to finance the sale of the bankrupt CharterCARE hospitals — Roger Williams and Fatima — appears to have hit another roadblock, and Rhode Island Governor Dan McKee is moving forward with a controversial move.

As GoLocal has previously reported, the initial effort to sell more than $166 million in bonds failed, and the deal was reconstituted.

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The deal's revamping took place over the summer to $150 million, and the split between taxable bonds and non-taxable bonds was restructured to make the sale of the bonds more attractive to buyers.

The sale of the bonds faces two significant challenges — first, S&P has given a BB- bond rating with a negative outlook.

In addition, since the initial bond package was prepared, Congress passed the so-called Big Beautiful Budget, which includes cuts to Medicaid, which is expected to decrease revenues to hospitals — especially those like Roger Williams and Fatima that are heavily dependent on those federal funds.

 

McKee Moving to Scoop Opioid Monies

According to two sources with direct knowledge, the bond market has not embraced the new deal, and McKee is scrambling to plug in tens of millions in state funds to salvage the deal.

McKee is now seeking to raid $10 million or more from the opioid funds to fill the gap. 

According to the Attorney General’s office, “In January 2022, Rhode Island joined the national opioid settlement with three major opioid distributors, providing over $90 million in funding for state and local efforts to address Rhode Island’s opioid crisis.”

“Together with settlements secured by Attorney General Neronha against opioid manufacturer Johnson & Johnson for $21 million and consulting firm McKinsey & Co. for $2.5 million, Rhode Island’s opioid litigation recoveries total more than $114 million over the next 18 years,” said the Attorney General’s office.

All expenditures from the fund are supposed to be approved by the Opioid Settlement Advisory Committee.

GoLocal has learned that McKee is attempting to circumvent that review process.

This move is in addition to a last-minute budget change that moved about $10 million in funding from programs for the elderly to a contract with CharterCARE.

Late on Friday night, the McKee administration admitted in an email to GoLocal that CharterCARE has submitted an application to seek the funds. GoLocal is aware that the application was done at the direction of the McKee administration. 

“CharterCARE recently submitted a request for a portion of Rhode Island’s opioid settlement funds specifically to preserve the detox unit at Roger Williams Medical Center. This is the only American Society of Addiction Medicine Level 4 medically managed intensive inpatient treatment program for detox services in the state. While no final decision has been made to refer this request to the Opioid Settlement Committee, any potential funding would be dedicated exclusively to support this detox unit and its vital work in helping individuals struggling with opioid addiction," said McKee's spokesperson, Laura Hart.

“This proposal has the potential to serve the dual purpose of helping Rhode Island continue to address the opioid epidemic while also supporting a crucial safety net hospital that provides vital health services to Rhode Islanders,” she added.

The CharterCARE letter was submitted on Wednesday and is signed by Benjamin Mingle. He is also the President of Centurion, the Georgia-based non-profit seeking to buy CharterCARE.

 

Neronha Weighs In

Reached on Thursday evening, Neronha told GoLocal, “I don’t know the specifics, but I do know they have a gap to close to meet our conditions [to approve the sale to Centurion]. My concern is preserving that $50 million escrow for as long as possible once they spin off from Prospect and avoid a return to bankruptcy court in Dallas, which will result either in closure or a sale process that, according to our bankruptcy counsel, would cost $20 to $30 million with no guarantee of a buyer. So the intent is to close this deal, and if they can’t make it, we end up on a receivership in [Rhode Island] as opposed to Dallas with a Rhode Island judge.”

The remaining $50 million in escrow is a portion of the funds Neronha secured from CharterCARE's parent company, Prospect Holding Company, and private equity firm Leonard Green in 2021. Prospect was placed into bankruptcy in January of 2025.

Neronha said Thursday, “Any use of the opioid monies we recovered, regardless of source, must be used for opioid treatment, prevention, and recovery.  While under the various consent decrees (there are several, for various defendants) there is an advisory council, on which I hold a seat, that makes recommendations regarding the kind of programs the money can be used for, like for inpatient or outpatient or safe injection sites, billboard campaigns, etc, EOHSS, RIDOH AND BHDDA ultimately decide which specific private entities receive the funds in those general areas, and the Governor appropriates them to those entities with the consent of the General Assembly in the budget process.  So they could direct funds to the hospitals for such purposes, following that process.  I haven’t been involved in any such activity.”

Rhode Island’s opioid fund agreement with all of the state’s cities and towns "ensures that all the funds will be directed to opioid abatement – including expanding access to opioid use disorder prevention, intervention, treatment, and recovery."

Under the agreement:

- 20% of the funds secured for abatement will go directly to all cities and towns based on a population-driven formula to be used solely for opioid abatement purposes.

- 80% of the funds secured for abatement will be overseen by the state’s Executive Office of Health and Human Services and allocated to opioid abatement programs throughout the state. In making these allocations, the Secretary of EOHHS will be informed by recommendations of an Advisory Committee, all subject to the state appropriations process.

The Advisory Committee, as required by the national settlement agreement, is comprised of an equal number of state and municipal representatives, as well as expert and community representatives and will work closely with key organizations coordinating the state’s response to the crisis, including the Governor’s Overdose Prevention and Intervention Task Force.

This story was first published 9/12/25 6:28 AM