Steward bankruptcy: Lawmaker sees momentum shift on Nashoba Valley Medical Center

Tuesday's bankruptcy court hearing in Texas may not alter a timeline that could result in the permanent shutdown of Nashoba Valley Medical Center in Ayer, and the loss of 490 jobs at the hospital, by the end of this month.

However, a state lawmaker believes there's a momentum shift from the federal courts to the communities served by Nashoba that are fighting to keep the hospital open.

State Sen. Jamie Eldridge, D-Marlborough, attended Tuesday night's Ayer Select Board meeting, where he said the board unanimously supported a resolution that asked Gov. Maura T. Healey's administration to declare a state of emergency for Nashoba Valley due to the potential closure of the hospital by bankrupt Steward Health Care System.

The resolution also called on Healey to enforce the state's 120-day notification requirement for hospital closures, something Steward hasn't met since it announced late last month it will shut down Nashoba by Aug. 31.

"It's a very dire situation," said Eldridge when asked if he's optimistic about Nashoba's future in light of Tuesday's court hearing and the board vote in Ayer. "There's a shift from the federal bankruptcy proceedings to what the state can do and what municipal governments can do. Hopefully a shift has happened in the past week."

Meanwhile, an internal UMass Memorial Health memo shared with the Telegram and Gazette shows a patient surge at UMass campuses in Leominster and Clinton.

"We are experiencing extremely high volumes of patients at the Leominster and Clinton Campuses," reads Monday's memo by Paul MacKinnon, chief operating officer of the Central New England Health Alliance that runs the operations at both campuses.

The surge is not connected to the imminent closure of Nashoba, said a statement from a UMass Memorial Health spokeswoman.

The statement noted the hospital system experienced a steady patient increase over the past several years due to higher levels of illness, longer inpatient stays, and the difficulty of discharging patients to lower levels of care because of staffing challenges in those facilities. Regular spikes in seasonal illness was also cited as a reason for fluctuations in patient numbers at UMass Hospitals.

Lease relief?

Lawyers in bankruptcy court Tuesday reportedly announced that two companies holding onerous leases on hospitals in Massachusetts owned by Steward had turned over the contracts to their mortgage lender, Apollo Global Management.

The move could mean a smoother path to sell the hospitals, because Steward is paying more than $100 million in lease payments annually for its eight hospitals to Medical Properties Trust and Macquarie Infrastructure Partners.

Now that Apollo controls the leases, the terms of those payments could be altered to lower amounts, paving the way for buyers to purchase six of Steward's eight hospitals in the Bay State. Steward lawyers said in prior court hearings there are buyers for the six hospitals, but no qualified bids for Nashoba Valley Medical Center and Carney Hospital in Dorchester.

Steward hasn't released the names and details of the bids. The hospitals that received qualified officers, according to Steward's court filings, include St. Elizabeth’s Medical Center in Boston, Holy Family Hospital in Methuen and Haverhill, Morton Hospital in Taunton, St. Anne’s Hospital in Fall River, and Good Samaritan Medical Center in Brockton.

Nashoba and Carney are losing money, according to Steward, and last week a bankruptcy judge approved Steward's move to sell both facilities.

Union continues the fight

Despite the uncertainty of Nashoba's and Carney's fates in light of Tuesday's court hearing, the Massachusetts Nurses Association said in an email that it's committed to keeping both facilities open beyond Aug. 31.

"Our effort to oppose and stop that closure remains in full force," said a union spokesman in an email when asked how the latest court developments impact Nashoba's future.

Steward is violating Massachusetts law, the union claims, because it's not adhering to the 120-day notification requirement.

Healey and some state lawmakers also demand Steward follow the full notification process, largely because it would give prospective buyers more time to make quality bids for the eight hospitals. However, Healey told a group of Nashoba nurses during a stop in Leominster last week that there is nothing she can do to stop Steward from closing Nashoba.

The formal notification process is run by the state Department of Public Health. The state agency can recommend that a hospital remain open, but it has no legal authority to force an owner to keep a hospital open.

Meanwhile, beyond the vote by the Ayer Select Board, the Boston's City Council is expected to debate a similar measure during its Wednesday meeting, according to the nurses union. The City of Methuen is exploring the possibility of taking Holy Family Hospital by eminent domain to help ensure its survival, said the union.

"The MNA, along with a growing number of community members, activists, state and municipal policy officials in these communities continue to advocate for the state to take immediate and aggressive action to preserve these vital health care facilities," said the union's email.

$30 million: staggered payments, with conditions

Tuesday's court session also reportedly approved staggered payments of the Healey administration's commitment to provide Steward with a $30 million advance in state Medicaid funds to keep the six hospitals running until they're sold.

The bankruptcy judge approved the payments, with the total amount in jeopardy because the Healey administration initially set a Tuesday deadline of advancing the $30 million only if deals to sell the hospitals were in place. Now a friendlier lease structure appears to make the financial elements of Steward's six hospitals more attractive to buyers, meaning there is some wiggle room for the Healey team when it comes to the $30 million.

Those positive feelings were expressed in a prepared statement Tuesday night from Healey's administration, with no mention of the fate of Nashoba and Carney hospitals.

“We are pleased that the Bankruptcy Court has approved our funding commitment for Massachusetts hospitals to remain open and provide care as we continue to advocate for patients and residents of this state. What’s imperative now is that Apollo, MPT and Steward's real estate partners do what's right for the people of Massachusetts and finalize deals so that the remaining five hospitals can be transferred to new owners. We look forward to a resolution being reached as soon as possible.”

The first two installments of the Medicaid advance reportedly include $11.3 million this week to Steward. There is a $18.6 million payment on Aug. 16, but only if deals to sell the six hospitals are inked by Friday.

Contact Henry Schwan at henry.schwan@telegram.com. Follow him on X: @henrytelegram.

This article originally appeared on Telegram & Gazette: Update on Steward bankruptcy, Nashoba Valley, other Mass. hospitals