The 15 members of the Delaware County state legislative delegation have asked Pennsylvania Attorney General Dave Sunday to launch a criminal investigation into Prospect Medical Holdings’ owners and petition a bankruptcy judge to get some of the $40 million back while extending ambulance services.
A letter signed by state Sens. Anthony H. Williams, D-8; Amanda Cappelletti, D-17; John Kane, D-9 and Tim Kearney, D-26 and state Reps. Carol Kazeem, D-159; Craig Williams, R-160; Leanne Krueger, D-161; Dave Delloso, D-162; Heather Boyd, D-163; Gina Curry, D-164; Jennifer O’Mara, D-165; Greg Vitali, D-166; Lisa Borowski, D-168; Regina Young, D-185, and Joanna McClinton, D-191, was sent to Sunday in anticipation of the April 30 hearing in the U.S. Bankruptcy Court of the Northern District of Texas.
There, U.S. Bankruptcy Court Chief Justice Stacey G.C. Jernigan is presiding over the Prospect Medical Holdings bankruptcy case and has ordered the expedited closure of Crozer Health.
The delegation had three requests of the attorney general.
“Please petition Judge Stacey Jernigan to require Prospect to pay for ambulance coverage at Crozer-Chester Medical Center for 16 weeks post-closing,” they asked. “Prospect’s current plan of 7-10 days is woefully inadequate.”
When Delaware County Memorial Hospital closed in 2022, “the number of people who continued to show up to DCMH after it was closed and then needed ambulance transport to an open ER was stunning,” they wrote, noting that 155 patients in the 12 months after the Upper Darby hospital closed needed transport from the location.
“Given the higher patient volume at Crozer-Chester, we believe Prospect should be required to pay for this expense as part of the $20 million to $30 million they have told the judge they budgeted for the closure process,” they wrote.
Secondly, they want the money back.
“Please petition Judge Stacey Jernigan to claw back the $40 million that has been invested since Prospect declared bankruptcy in January in an effort to prevent a closure,” they wrote.
The delegation noted that at Sunday’s direction, the state contributed $10.2 million, Delaware County contributed $9.8 million and the Foundation for Delaware County contributed $20 million in order to keep Crozer afloat during the bankruptcy.
“Given Prospect’s failure to reach a deal for an Asset Purchase Agreement, these dollars are needed to stand up care in the communities that Prospect is leaving behind,” they wrote.
Finally, they asked for accountability.
“Open a criminal investigation into Prospect’s current and former owners, including those who benefited from $457 million in dividends paid after Prospect sold Crozer’s real estate in 2019,” they wrote. “Given the reports from staff of systemic divestment in the infrastructure over the nine years that Prospect owned the Crozer Health system, we implore you to leave no stone unturned in holding them accountable.”
They concluded, “We are counting on you to continue to fight.”
Prospect Medical Holdings did not respond to requests for comment.
The Attorney General wrote back to the delegation.
“I am heartbroken and frankly, angry that this has come to pass,” Sunday said. “As I said publicly and in private during the negotiations that I attended, the closure of this system was an avoidable tragedy, one that I know you, in coordination with my office, and the Governor’s office, did everything in our power to avoid.
“The next legal phase of this case is seeking relief for the harms caused by the closure of Crozer in the bankruptcy court and elsewhere,” he continued. “I have instructed my team to explore every legal tool to obtain such relief. Unfortunately, we won’t know the outcomes of those efforts for quite some time.”
Sunday said his office would review each of the three suggestions. However, he warned that getting any kind of clawback from the bankruptcy court would be difficult.
“As to a possible criminal investigation, all I can say is that my office will adhere to the facts and the law of this situation,” he wrote. “If criminal acts occurred that we have jurisdiction over, we will pursue them. We cannot otherwise comment on ongoing or potentially ongoing investigatoins. I know this is a frustrating posture, but it protects potential future legal action. If a legal tool is available to us, we will use it to hold Leonard Green and Associates accountable.”
Sunday then concluded, “I am praying for you all and your constituents through the closure process. I know this is a difficult time for the Delaware County community and Crozer’s patients and employees.”
Lawmaker angry
Rep. Delloso spoke about the situation with Crozer Health.
“I won’t sugarcoat it: this is a sad week for Delaware County,” he said. “The commonwealth of Pennsylvania provided $10.2 million to keep Crozer open. The county provided $9.8 million. Penn gave $5 million. And the Foundation for Delaware County gave another $20 million. And still, Crozer Health System is closing.
“Even after these millions in aid, Crozer remained in so much debt that no one wanted to buy them,” he continued. “After all, who would want to take on a project that could only last a few months?
Delloso said there should be consequences.
“Prospect Holdings deserves all the blame for taking our community hospitals and sucking all the profit they could out of them, leaving us to clean up the mess,” he said. “They’ve done the same thing in other states, too. I deeply lament that no one will be jailed over this injustice committed on the good people of the 162nd Legislative District.”
Delloso promised to find ways to help those on the front lines.
“Now more than ever I will be seeking support for our emergency services providers to include local police departments, fire stations, and EMS providers,” he said.
Closure moving forward
The closing down of Crozer Health continues to move forward.
As of Wednesday, April 30, the Crozer-Chester Medical Center Emergency Department will be fully closed. The one at Taylor Hospital closed Saturday and other functions at that hospital, including the operating room, rehabilitation, obstetrics/gynecology and labs closed Friday.
Surgery, in-patient psychiatry, the burn unit, intensive care unit, the neonatal intensive care unit, dialysis, radiology, labs, nuclear medicine and oncology will partially close at Crozer-Chester Medical Center Wednesday and will fully close Friday. By Friday, everything at Crozer-Chester Medical Center will be closed.
Home Health services will close by May 11 and Radiation Therapy will close by May 19.
A large-scale job fair has been scheduled for those employees impacted by this situation.
The Pennsylvania CareerLink and Delaware County are hosting a resource fair entitled “Former Crozer Employees Job Fair, Let’s Get Back to Work” from 10 a.m. to 2 p.m. May 13 at Subaru Park, 1 Stadium Drive in Chester. More than 100 employers are anticipated to be there.
Employers and job seekers can get more information at PA.CrozerTransitionCenter.info@edsi.com or by calling 610-447-3350. Crozer workers can text “HEALTHJOBS” to 888777 for additional notifications.
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