--- title: "Prospect CharterCARE in Rhode Island, 2014–2026" language: en canonical: https://dossiertwist.com/dossiers/prospect-medical-holdings/rhode-island/ as_of: 2026-10-15 keywords: ["Prospect Medical Holdings","Leonard Green & Partners","Samuel Lee","David Topper","Medical Properties Trust","Ivy Holdings","Chamber Inc.","Prospect CharterCARE","Crozer Health","Waterbury Hospital","Eastern Connecticut Health Network","Roger Williams Medical Center","Our Lady of Fatima Hospital","Chapter 11","sale-leaseback","dividend recapitalisation","Hospital Conversions Act","PHP Holdings","Astrana Health","NOR Healthcare Systems"] --- # Prospect CharterCARE in Rhode Island, 2014–2026 **Question.** What happened to the Rhode Island hospitals while Prospect controlled them? **Answer.** Prospect bought 85% of the CharterCARE hospitals, Roger Williams Medical Center and Our Lady of Fatima Hospital, in 2014. State consultants later found that PMH charged management fees, drew pandemic funds out of the hospitals and decided which vendors they could pay; unpaid suppliers led to cancelled surgeries, a 2023 Department of Health order and an Attorney General's suit. After a conditional 2024 approval and the bankruptcy, The Centurion Foundation bought the hospitals in March 2026. ## The 2014 joint venture - Analysis: On or about October 18, 2013 PMH, Prospect East Holdings, Inc. and Prospect East Hospital Advisory Services, LLC, together with Prospect CharterCARE, applied under Rhode Island's Hospital Conversions Act to buy assets of the nonprofit CharterCARE Health Partners, Roger Williams Medical Center and St. Joseph Health Services of Rhode Island and form a joint venture to own and operate the CharterCARE system; the Attorney General issued a decision on May 16, 2014. PMH owned 85% and CharterCARE Health Partners 15% of the new Prospect CharterCARE, whose board the two owners appointed equally; PMH's chief restructuring officer later described the June 2014 partnership as making Prospect the majority owner while sharing governance equally with CharterCARE Community Board. The transaction included a $50 million long-term capital commitment to be funded by PMH and an annual $10 million routine commitment by Prospect CharterCARE. The Department of Health's 2024 decision gives the price as $45 million for the 85% interest, with the $50 million to be spent within four years of closing, and a nonprofit research report gave the same $45 million; the 2014 transaction documents themselves are not retained. [src-010] [src-003] [src-002] [src-040] [src-037] - Analysis: By 2021 the structure was: Prospect East Holdings, Inc., a wholly owned PMH subsidiary, held PMH's interest in Prospect CharterCARE, LLC; Prospect East Hospital Advisory Services, LLC, also wholly owned, oversaw day-to-day management; and Prospect CharterCARE owned Prospect CharterCARE RWMC, LLC (Roger Williams Medical Center, Providence, licence HOSP00133) and Prospect CharterCARE SJHSRI, LLC (Our Lady of Fatima Hospital, North Providence, licence HOSP00132). Jeffrey Liebman was chief executive of Prospect CharterCARE and both hospital companies at the time of the 2020 application and in 2024, and a 2024 provider registry entry lists Liebman as authorised official of CharterCARE Our Lady of Fatima Hospital. An independent monitor, Affiliated Monitors Inc., concluded its review of the 2014 commitments in 2020, finding that over the four-year monitoring period Prospect had spent $63,815,932.22 on long-term capital expenditure and Prospect CharterCARE $51,398,707.77 on routine expenses. [src-003] [src-010] [src-078] - Analysis: An appraisal dated April 1, 2024 for the Attorney General's consultant identified Prospect CharterCARE, LLC as the fee-simple owner of the hospital real estate, with no transactions involving those assets in the preceding three years, and valued the real property at a hypothetical $94 million and equipment at $27 million. The two hospitals entered into Property Assessed Clean Energy (PACE) financing agreements totalling about $60 million, which attach to the properties as tax liens; the Roger Williams financing of about $42 million was agreed in May 2020 at 5.75%, maturing on April 30, 2045, with payments collected through property tax bills. [src-088] [src-003] ## Fees, transfers and pandemic money - Analysis: As managing member of Prospect CharterCARE, Prospect East delegated day-to-day management of the hospitals to Prospect East Hospital Advisory Services under a management services agreement. The Attorney General found that PMH's average annual support to the hospitals beyond their own revenue was $14.7 million, which included a management fee averaging $6,977,000 a year, and made discontinuing the fee a condition of the 2021 transaction. Prospect CharterCARE's audited income statements, as tabulated by the Attorney General's 2024 consultant, show management fee expense of $7.40 million in fiscal 2019, $6.53 million in 2020, $4.00 million in 2021 and none in 2022; in fiscal 2019 $24.7 million of accrued and unpaid fees owed to PMH was forgiven and recorded as a non-cash equity contribution. [src-003] [src-088] - Analysis: PYA reported that in fiscal 2020 Prospect CharterCARE received about $41 million of Provider Relief Fund distributions and about $27.5 million of Medicare advance funding and transferred the $68.5 million total to PMH, settling its prior balance owed to PMH and leaving a receivable from PMH on its balance sheet. The Attorney General's consultant James P. Carris interpreted the hospitals' fiscal-2020 balance sheets, which showed $21.6 million due from affiliates at Fatima's operating company after a one-year change of $26.8 million, and $31.3 million at Roger Williams after a change of $57.1 million, about $35 million of it from pandemic relief funds, as transfers by PMH or its affiliates out of the hospitals to fund other operations, and concluded that Prospect CharterCARE was not substantially viable without PMH's support. Carris reported that the Fatima operating company's net revenue was flat at $141.2 million to $144.9 million from fiscal 2015 to 2019 with a cumulative five-year loss of $8.7 million, and that its fiscal-2020 results included a $22.3 million legal settlement. [src-003] ## The St. Joseph pension - Analysis: Prospect did not assume the St. Joseph Health Services of Rhode Island retirement plan in the 2014 joint venture. After the plan went into receivership (PC-2017-3865, R.I. Super. Ct.), litigation including fraud and misrepresentation claims was brought against PMH, Leonard Green and others over the handling of the pension. PMH agreed to pay $27,250,000, with no admission of liability. On July 29, 2021 the U.S. District Court for the District of Rhode Island (C.A. No. 18-328 WES) granted final approval of the class settlement in the suit brought by the plan receiver, Stephen Del Sesto, against PMH, Prospect East Holdings, Prospect CharterCARE and its two hospital companies and The Angell Pension Group. The gross settlement amount was $30,000,000, including $2,750,000 from a Rhode Island Superior Court deposit and two JPMorgan Chase letters of credit for $22,250,000 and $5,000,000, and class counsel was awarded $7,000,000. The order also names Samuel Lee, David Topper and the liquidating receiver of CharterCARE Community Board as parties to the settlement; the class comprised more than 2,700 plan participants. [src-003] [src-071] ## Quality, supplies and enforcement - Analysis: The Attorney General's 2021 decision notes litigation in the First Circuit, NLRB v. Prospect CharterCARE (No. 19-2289), that arose when Prospect refused to provide an internal report on an operating-room equipment issue at Our Lady of Fatima Hospital. It states that the CMS star ratings of the two hospitals had not improved since 2014, when both were rated 3, and that Fatima's had fallen to 2. The decision records that Prospect CharterCARE's management vigorously disputed these criticisms and asserted that the quality of care at the hospitals was high. [src-003] - Analysis: Veralon reported, based on testimony of CharterCARE management including chief executive Jeffrey Liebman and on the system's financial statements, that CharterCARE depended on PMH funding to cover its operating shortfalls but that the funding was insufficient to meet vendor obligations, causing supply problems; that CharterCARE did not control its own accounts payable because PMH told it daily which vendors to pay and how much; and that its payables grew from $41 million at September 30, 2022 to $63 million a year later and about $69 million at March 31, 2024. On November 9, 2023 the Department of Health issued an Immediate Compliance Order to PMH and related entities after finding that Prospect's underfunding of Roger Williams and Fatima was affecting operations: in October 2023 at least 19 elective surgeries were cancelled because equipment and supplies were unavailable owing to non-payment of vendors, PMH swept all patient revenue from the hospitals daily and returned an operating allowance weekly, and as of October 24 more than 250 of about 830 vendors required cash on delivery. CMS issued statements of deficiencies to both hospitals for rescheduled surgeries and a lack of medical supplies that delayed procedures, and a 2024 condition required the parties to fund repairs under CMS-approved plans of correction for the deficiencies noted on form CMS-2567 on April 2, 2024. [src-088] [src-082] - Analysis: In November 2023 the Attorney General sued PMH (Neronha v. Prospect Medical Holdings, C.A. No. PC-2023-05832) for failing to comply with the 2021 conditions, including failing to pay accounts payable more than 90 days overdue, which then exceeded $24 million; the Connecticut Attorney General's later draft complaint describes the overdue payables in the suit as more than $18.9 million. On June 12, 2024 Associate Justice Brian P. Stern of the Rhode Island Superior Court granted a preliminary injunction requiring Prospect to pay $17,326,526 toward the overdue accounts payable. [src-088] ## The sale to The Centurion Foundation - Analysis: PMH engaged the investment bank H2C, which began looking for a buyer in April 2021 and sent a request for proposals to 24 hospitals and health systems. On November 17, 2022 The Centurion Foundation, Inc. entered into an asset purchase agreement with PMH to buy the CharterCARE system, naming QHR Health, LLC as manager of the facilities; PMH's chief restructuring officer described an $80 million price for the two hospitals. The Attorney General's 2024 decision describes Centurion as a Georgia-based 501(c)(3) corporation with no prior experience owning or operating an acute-care hospital, a private foundation of about three employees specialising in real estate finance, which initially planned to partner with QHR Health (Ovation Healthcare) and after QHR's exit planned to rely on CharterCARE's existing leadership, principally Liebman and the existing team; the Attorney General's consultant reported Centurion revenues of $15.6 million with a surplus of about $100,000 and more than $720 million of long-term bonds payable at June 2023. Asked at an October 22, 2024 meeting of the Rhode Island Health Services Council about Centurion's portfolio and prior experience, its president Benjamin Mingle said: “to be really transparent with you, we don’t have a case that was exactly like this...[b]ut we have all those elements.” [src-088] [src-002] [src-037] - Analysis: The Attorney General found that Centurion planned a fully leveraged acquisition in which the new CharterCARE entities would borrow about $160 million, $80 million of which would remain on the new system's books with the rest paid to PMH as the purchase price; the applicants represented total transaction debt of $193 million if the PACE loans were assumed. Under the amended agreement Centurion would pay PMH $80 million less a $5 million indemnity escrow, outstanding acquisition costs, a Centurion note, any assumed PACE balance and a working capital adjustment. Asked what would happen if the new system could not take on more debt, Centurion answered that it could not predict the system's response but that the system would do its best to resolve any challenges by working with its counterparts in the state; the Attorney General read this as shifting the risk of failure to the State and its taxpayers. [src-088] - Analysis: Veralon, the Attorney General's consultant, assessed that the confidential information memorandum H2C used to market the system contained financial statements that may have been misleading compared with actual performance, and that the historical data and testimony contradicted the notion of a history of profitability; it found that the system lost $9.6 million in fiscal 2019, $14.6 million in 2020, $16.8 million in 2021 and $29.3 million in 2022. The Attorney General found that the CharterCARE board and the PMH board, as seller, failed to sufficiently interrogate the transaction and Centurion's ability to meet the hospitals' needs, particularly after QHR's exit, and identified a perceived conflict of interest for PMH board members charged with ensuring the sale. The consultant noted that on November 8, 2022 the PMH board considered the Centurion and QHR offer, with Von Crockett presenting, and that it was unclear how the board decided to proceed after QHR withdrew; the board minutes cited are partly redacted. [src-088] - Analysis: On June 20, 2024 Attorney General Peter F. Neronha conditionally approved the change of ownership from PMH to Centurion under the Hospital Conversions Act with 40 conditions, and on November 14, 2024 an amended decision changed four of them. The conditions required the parties to fund a $66.8 million Hospital Fund, to include the roughly $45 million remaining in the 2021 escrows with accrued interest if Leonard Green and Prospect assigned their rights in those funds; any debts owed by Centurion or the new system to Prospect after closing had to take the form of an unsecured subordinated note; and before closing Prospect had to release all liens and guarantees over CharterCARE assets securing its May 23, 2023 loan and pledge agreements with MPT TRS Lender PMH, LLC. [src-025] [src-088] - Analysis: The sale was completed through the bankruptcy. On February 2, 2025 PMH announced an amended and restated purchase agreement to sell CharterCARE Health Partners, including the two hospitals, to Centurion and other nonprofit corporations, and on May 22, 2025 the bankruptcy court approved the assumption of the agreement, the Rhode Island reorganisation and the sale free and clear of interests. On October 30, 2025 the debtors moved for relief from the sale order and for authority to transfer the hospitals to the State of Rhode Island or, alternatively, to close them. On March 6, 2026 Centurion completed the acquisition of Roger Williams Medical Center, Our Lady of Fatima Hospital and related assets, financed with $101 million of private bonds raised through Bank of America under the sponsorship of the Rhode Island Health and Education Building Corporation and an $18 million supplemental reserve fund created by the state; the hospitals passed to a new nonprofit, CharterCARE Health of Rhode Island, with Ben Mingle as chairman and Liebman as chief executive. [src-030] [src-033] [src-026] ## Sources - [src-010] Chamber Inc. and Ivy Holdings Inc. Hospital Conversions Act application (resubmitted March 18, 2020), Office of the Rhode Island Attorney General (applicant filing), 2020-03-18 - [src-003] Rhode Island Attorney General decision on the Chamber Inc. / Ivy Holdings Inc. Hospital Conversions Act application, Office of the Rhode Island Attorney General, 2021-06-01 - [src-002] Court record source · src-002 - [src-040] Research source · src-040 - [src-037] Court record source · src-037 - [src-078] NPPES registry record for NPI 1346079209 (CharterCARE Our Lady of Fatima Hospital), Centers for Medicare & Medicaid Services (NPPES) - [src-088] Rhode Island Attorney General decision on the Centurion Foundation Hospital Conversions Act applications, with the November 14, 2024 amendment, Office of the Rhode Island Attorney General, 2024-06-20 - [src-071] Order granting final approval of the class settlement in Del Sesto v. Prospect CharterCARE et al. (D.R.I. No. 1:18-cv-00328, Doc. 217), U.S. Government Publishing Office (GovInfo), 2021-07-29 - [src-082] Rhode Island Department of Health release on its compliance order to the owners of Roger Williams and Fatima hospitals, State of Rhode Island, 2023-11-09 - [src-025] Rhode Island Attorney General release on conditions imposed on the proposed hospital ownership change, Office of the Rhode Island Attorney General, 2024-06-20 - [src-030] Company statement source · src-030 - [src-033] Court record source · src-033 - [src-026] Company statement source · src-026