The CEO of a troubled healthcare system in bankruptcy ignored a legal order to testify in front of Congress on Thursday.
Steward Health Care System CEO Dr. Ralph de la Torre had been summoned to Washington to answer questions on the health company’s finances and the handling of its hospitals.
Doctors and nurses at Steward’s hospitals have seen cutbacks, layoffs, shutdowns and problems with supplies, equipment and delayed payments to vendors and workers, including in South Florida.
Sen. Bernie Sanders of Vermont, who chairs the Health, Education, Labor and Pensions committee that issued the subpoena in July, says the CEO will now face the consequences.
Sanders and ranking member Sen. Bill Cassidy of Louisiana say they will ask the committee next week to vote on two resolutions to pursue “both civil enforcement of the subpoena and criminal charges” against de la Torre.
If passed, both resolutions would go to the full Senate for a vote. The resolution for civil enforcement will instruct the “Senate Legal Counsel to bring a civil suit in the District Court of Columbia to require Dr. de la Torre’s compliance with the subpoena and his testimony before the HELP committee,” according to a news release from Sanders’ office. “The criminal contempt resolution would refer the matter to the U.S. Attorney for the District of Columbia to criminally prosecute Dr. de la Torre for failing to comply with the subpoena.”
Thursday’s hearing comes after the committee launched its own inquiry into the healthcare system’s bankruptcy and voted in July to subpoena the hospital executive after he refused to voluntarily testify about his company’s financial crisis. Steward Health is also under a federal investigation for possible corruption related to business dealings involving state-run hospitals it managed in Malta, an island in Southern Europe.
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“How many of Steward’s hospitals could have been prevented from closing down, how many lives could have been saved, how many healthcare workers would still have their jobs if Dr. de la Torre spent $160 million on high-quality healthcare at the hospitals he managed instead of a yacht, two private jets, a luxury fishing boat and a massive contribution to a wealthy prep school?” Sanders said in the hearing.
This is not the first time Steward’s CEO has faced criticism for his lavish lifestyle, which recently included a family vacation in Paris for the 2024 summer Olympics while hospital closings were announced. A de la Torre spokesperson told the NBC affiliate in Boston that the CEO is not part of the company’s “transformation committee” that is involved in the closure decisions and announcements.
Why did Steward’s CEO not appear before Congress?
The CEO’s no-show at Thursday’s hearing wasn’t a surprise. Last week, his attorney Alexander Merton told the committee in a letter obtained by the Miami Herald that de la Torre would not participate and asked to reschedule the hearing until after Steward Health’s bankruptcy process was completed.
Merton, in the letter, said it would be “inappropriate” and also “may run afoul of the federal court order prohibiting him” from discussing Steward’s bankruptcy-related issues during the process. He also criticized the committee, saying some of its members appear “determined to turn the hearing into a pseudo-criminal proceeding in which they use the time, not to gather facts, but to convict Dr. de la Torre in the eyes of public opinion.”
At Thursday’s hearing, Cassidy said the committee told de la Torre that “his objections to the committee’s subpoena have no merit and directed him to comply.” The hearing continued without the hospital executive and included testimony from Massachusetts nurses and public officials from Louisiana on how patient care was affected at Steward’s hospitals.
Rebecca Kral, a spokesperson for de la Torre, told the Miami Herald the CEO’s rescheduling request is for valid reasons.
“Importantly, the committee continues to ignore the fact that there is an ongoing settlement effort underway with all interested parties that paves the way to keep all of Steward’s remaining hospitals open and preserve jobs,” Kral said. “Dr. de la Torre cannot testify or otherwise publicly comment so as not to interfere with this process. Dr. de la Torre will not do anything that could jeopardize this effort.”
Steward makes a deal with landlord
Steward Health on Wednesday was given the OK in Houston bankruptcy court to move forward on a deal with its landlord that is meant to help keep hospitals open.
The health system, once considered to be the largest physician-owned healthcare network in the country with 31 hospitals, including eight in Florida, had been trying to sell all of its hospitals to thin its $9 billion debt after filing for Chapter 11 bankruptcy in May.
In South Florida, the sale included Palmetto General Hospital in Hialeah, Coral Gables Hospital, Hialeah Hospital, North Shore Medical Center in North Miami-Dade and Florida Medical Center in Lauderdale Lakes.
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But bad blood between Steward Health and Medical Properties Trust, the company that owns the land the hospitals sit on, complicated the sales. The two had disputes over unpaid rent and accused each other in court of attempting to interfere with potential sales to try and make more money.
While Steward did secure deals to sell some of its hospitals, including its three Florida Space Coast hospitals, the health system still had a batch of hospitals up for sale. Money was tight. And it wanted out of its leases.
That paved the way for a settlement with its landlord. Under the deal, Steward was given the OK in bankruptcy court to hand over the remainder of its hospitals to the landlord, which would then partner with other health companies to temporarily run the hospitals until it finds a permanent operator.
For the South Florida hospitals, Medical Properties Trust has tapped Healthcare Systems of America – Florida LLC to be “interim manager,” though Steward will still be involved, at least for now, due to licenses and contract obligations.
The hearing to finalize the settlement is set for next week.
