BOSTON — State government has prepared for “different scenarios” that could unfold as a crucial forbearance period ends Tuesday for the embattled Steward Health Care, and Gov. Maura Healey said her administration will be ready to respond.
Steward, which has nine hospitals operating in Massachusetts, is reportedly in deep debt due to missed payments to vendors and its de facto landlord, Medical Properties Trust.
Steward announced in February that it had secured an additional $150 million — on top of a $600 million loan in the summer of 2023 — in bridge financing, which it said would allow it “to reset its operations and address vendor obligations, which it is working diligently to resolve in service to getting to a sustainable operating model.”
Lenders agreed to extend the loan’s forbearance agreement through April 30 to give Steward time to execute the plan.
Earlier this month, U.S. Sens. Elizabeth Warren and Ed Markey said in a letter to Steward’s creditors that the health care system “is reported to be preparing for a potential bankruptcy following threats from your company and other members of the consortium to call the loan.”
A Steward spokesperson said they have no comment on the deadline to resume payments.
Asked about the deadline and how it might affect the ongoing Steward saga, Healey told reporters Tuesday morning that it will all depend on what Steward chooses to do and reiterated that she generally does not trust the company.
“We aren’t sure when they say that they’re going to do something by a certain date. So far, you haven’t been able to take them at their word. And all we can do is continue to prepare and, as I say, the focus continues to be on how to protect patients, jobs, and the stability of the market,” Healey said.
Asked what the next steps could be depending on whether or not Steward satisfies its lenders’ requirements by the deadline, the governor said, “you’re exactly right. It is a ‘depending on,’ right.”
“And so, there’s different scenarios that will flow from different actions that they may take,” Healey told reporters after speaking to the New England Council in downtown Boston.
Secretary of Health and Human Services Kate Walsh told the Senate Post Audit and Oversight Committee last week she has a call every day at 7:30 a.m. to talk over the latest issues involving Steward with other government officials, outside lawyers, representatives of the health care industry, and more.
“We also have expert advisers to guide us with respect to a national bankruptcy if that were to occur,” the secretary said last week. She also acknowledged that receivership has been discussed.
During her address to the business group Tuesday, the governor said she thinks “the right person is in charge” in Walsh, who has led the state’s prep work along with Public Health Commissioner Robbie Goldstein.
“(There have been) a lot of conversations over the course of several months to figure out what happens in the event there is a bankruptcy. But also, what’s the long-term vision here? What do we need to do to reorganize and right-size primary care, mental health, behavioral health, access to health care?” Healey said.
“We’re gonna look different on the other side of this, be honest with you — we’re going to look different on the other side of this. But our job is to work to try to situate us as best as we possibly can.”