Lamont promises patient safety as hospital operator files for bankruptcy

Gov. Ned Lamont and other state officials sought to reassure patients Monday after the owner of three local hospitals filed for bankruptcy.

“Some people think bankruptcy means the lights go out and the party’s over,” Lamont said. “That’s not true at all.”

California-based Prospect Medical Holdings filed Chapter 11 bankruptcy over the weekend.

The struggling private equity firm owns Waterbury, Manchester Memorial and Rockville General hospitals.

The company said the restructuring will help with the sale of other hospital properties, including in Pennsylvania and Rhode Island.

“Divesting our operations outside of California will ensure that they receive necessary financial support so that the communities that rely on those facilities will maintain continued access to highly coordinated, personalized, and critical healthcare services long into the future,” Prospect Holdings CEO Von Crockett said in a statement.

The filing raised questions about a proposed purchase by Yale-New Haven Health, though.

Yale-New Haven agreed in 2022 to purchase the three Connecticut hospitals for $435 million but the deal has been stalled ever since.

The deal was delayed because of the state’s Certificate of Need process, a requirement for all hospital sales or mergers.

Then Yale New Haven filed a lawsuit in 2024 looking to amend or leave the deal, pointing to deteriorating conditions at the hospitals.

“Yale New Haven Health raised the alarm about this inevitability in the lawsuit we filed last year, recognizing Prospect’s lack of investment and mismanagement of the Connecticut Prospect hospitals,” the network said in a statement.

Lamont and Attorney General William Tong remained hopeful a deal could go through. They added they’ll do everything they can to help ensure a sale that protects the interests of patients.

“I'll just be very candid, if we could all be a hero and just make this all OK, right, we would have done it already,” Tong said.

Tong also told reporters he’s held off filing lawsuits to this point but would consider legal action against Prospect if needed to ensure patient care.

Department of Public Health Commissioner Dr. Manisha Juthani said her agency has had a monitor in Waterbury Hospital for weeks after a consent order.

The DPH is also in talks with Prospect about upping supervision, including monitors, at the other two locations.

“It’s our job to make sure that everyone provider and every institution is upholding their end of the bargain,” she said.

Deborah Weymouth, President and CEO of Prospect’s Connecticut operations, said the three hospitals are committed to patient care and are working with the state.

As Yale New Haven has balked at the deal, some lawmakers have questioned whether the state should offer money to help facilitate the sale.

“At some point, the public policy question becomes what happens to the future of these hospitals, to the people who rely on them for care,” said Rep. Jason Rojas, (D-Majority Leader).

Rep. Vincent Candelora (R-Minority Leader) even said the state bares some responsibility in the deal being stalled after the prolonged approval process.

“The state has culpability in this and I think they’re going to need to somehow put this deal together,” he said.

State agencies can takeover nursing homes through a process called receivership, but no such mechanism exists for hospitals.

When asked about creating a process to do that, Lamont remained confident a sale would go through. He also maintained his stance that the state should not offer incentives for a private deal.

“They're good hospitals, they’ve got great doctors,” he said. “They're patient load, their revenue’s gone up, not down.”