DALLAS — The Dallas-based hospital operator Steward Health Care System faces multiple lawsuits alleging that it has not paid its landlords or vendors millions of dollars in exchange for rent, services or supplies.
Among those debts, the group's landlord, Medical Properties Trust (MPT), said that it’s owed about $50 million in unpaid rent from Steward.
Earlier this month, MTP said that Steward delayed paying a portion of its September and October rent, but that it had continued making partial monthly rent payments. As of Dec. 31, 2023, however, MPT said Steward was $50 million behind in its payments.
In a press release, MPT said that it had agreed to a $60 million bridge loan to Steward to help pay off that debt owed, and that, as part of the plan, "Steward is pursuing several strategic transactions, including the potential sale or re-tenanting of certain hospital operations as well as divestiture of non-core operations."
In a statement shared with the Boston Globe, Steward further detailed its plans to pay off its debt.
"While we are pursuing inequities and our aggressive advocacy for fairer reimbursements, Steward is advancing an action plan to strengthen its liquidity, restore its balance sheet and put the tools necessary in place to continue forward as a key provider of healthcare services to our patients, communities, physicians, and employees," that statement read.
Steward operates 33 hospitals in nine states, including multiple facilities in Texas and Massachusetts, according to its website. It is among the largest private, for-profit health systems in the country.
As of Fall 2023, Steward boasted 33,000 employees, according to its website. It is unclear how many are employed by Steward across Texas or at its Downtown Dallas headquarters overlooking Klyde Warren Park. Per reports, Steward employs more than 16,000 nurses, doctors and other health care workers in Massachusetts.
According to its website, Steward operates five hospitals in Texas -- in Port Arthur, Odessa, Big Springs, Houston and Texarkana.
A sixth facility that it had previously operated in the state, the Medical Center of Southeast Texas in Beaumont, is closing this week.
"After careful consideration, The Medical Center of Southeast Texas announced it plans to end all hospital-related services, including its Emergency Department, at its Beaumont Campus effective February 2, 2024," Steward said in a statement announcing that facility's closure. "All care currently offered at that campus will be accommodated at the Port Arthur Campus, which has world-class stroke and trauma care, neonatal intensive care, orthopedic services and more. We found that the Beaumont campus was severely underutilized given the needs in the region, treating only 27 inpatients in total last year. We have worked to make appropriate and required notifications to local and state regulators and our team members at TMCST Beaumont Campus.”
A spokesperson with Steward's PR firm said that the company's financial concerns were "separate from the Beaumont issue."
In Massachusetts, however, legislators fear that the company's financial standing could soon lead to the sudden closure of multiple hospitals in the state.
There, as in Texas, Steward has already shuttered one facility this year.
Last week, members of Massachusetts' congressional delegation sent a joint letter to Steward Health Care System CEO Dr. Ralph de la Torre, detailing their concerns of future, additional fallout relating to his company's ongoing financial issues.
"We write regarding recent reports indicating that Steward Health Care System is in grave financial distress," the letter reads. "This comes in the wake of the announced closure of Steward’s New England Sinai Hospital, allegations that Steward St. Elizabeth’s Medical Center, Steward Medical Group, and Steward Health Care System violated the False Claims Act, and reports that Steward is unable to meet existing rent and loan repayment responsibilities. The abrupt closure of Steward’s Massachusetts hospitals would significantly limit access to inpatient critical care and inpatient behavioral health care, as well as maternal and newborn health services in eastern Massachusetts."
The U.S. Attorney’s Office in Massachusetts in late December announced it had filed a complaint alleging Steward violated the False Claims Act by hiring a cardiac surgeon and paying him varied compensation based on the volume of cardiovascular surgeries he referred to his hospital.
On Wednesday, the Massachusetts Department of Public Health held a meeting to discuss Steward's situation.
Per reports, Steward issued a statement in December addressing its financial standing. In it, the company blamed public pay options such as Medicare and Medicaid, as well as the taxes that it incurs in transactions as a for-profit business that nonprofit hospitals are not charged, as the reasons for its Massachusetts' hospitals struggles.
The statement, which the company reportedly recirculated this week in response to Wednesday's meeting, said Steward had lost $22 million in operating the facility it announced plans to close, and that it could no longer afford to keep it open.
“We are encouraged that Steward officials are engaged with state officials," the Massachusetts delegation said in its letter to Steward. "However, residents, workers, regulators, and elected officials must have a seat at the table for conversations about Steward’s plan for the future and to ensure continued access to high quality medical care in their communities."
Steward did not respond to questions from WFAA about its financial standing and what that could mean for the continued operation of its hospitals in Texas.
