CEO Of Troubled Hospital Group Steward Health Care Resigns, Could Face Criminal Investigation
Steward Health Care CEO Ralph de la Torre has resigned after failing to appear before a Senate panel and being held in contempt.
Dallas-based Steward Health this year has filed for Chapter 11 bankruptcy, attempted to sue its landlord and faced allegations of fraud and corruption. Despite these troubles, a spokesperson for de la Torre told CBS News that the executive and Steward are separating on “mutually agreeable terms.”
De la Torre “will continue to be a tireless advocate for the improvement of reimbursement rates for the underprivileged patient population,” the spokesperson said. His resignation will be effective Tuesday.
While the de la Torre spokesman said “Steward's financial challenges put a much-needed spotlight on Massachusetts' ongoing failure to fix its healthcare structure and the inequities in its state system,” the politicians looking to hold him accountable shared starkly different opinions.
Sen. Elizabeth Warren, a Democrat from Massachusetts, said on social media platform X that the resignation means Massachusetts communities are “finally free from Ralph’s destructive reign.” Warren added that de la Torre still faces a contempt charge and should be investigated for other crimes he may have committed while in the position.
The Senate unanimously voted on Wednesday to hold de la Torre in contempt of Congress and asked the Department of Justice to pursue criminal charges for failing to comply with the subpoena. This is the first time since 1971 that body has asked the DOJ to pursue criminal contempt charges against an individual, according to The Washington Post.
Rebecca Kral, a spokeswoman for de la Torre, told the Post that her boss didn't comply with a subpoena to appear before the Senate Committee on Health, Education, Labor and Pensions on Sept. 12 by invoking his Fifth Amendment right not to answer questions.
Late Monday morning, de la Torre responded with a lawsuit accusing the Senate panel of violating his constitutional right against self-incrimination and asking the U.S. District Court in Washington, D.C., to stop contempt proceedings.
Nurses and public officials told the Senate committee that Steward prioritized profits over patient care, Reuters reported. Steward leaders are accused of extracting millions for extravagant paydays while its hospitals struggled to meet mortgage payments and buy medical equipment.
“While they got rich, workers, patients and communities suffered,” Sen. Ed Markey, a Democrat from Massachusetts, said on the Senate floor, according to the Post. “Nurses paid out of pocket for cardboard bereavement boxes for the babies to help grieving parents who had just lost a newborn.”
Steward is the largest privately owned hospital network in the U.S. and the main tenant of Medical Properties Trust, a REIT that buys hospital real estate from operators and leases it back to them. MPT bought $1.25B in properties from Steward in 2016.
Steward filed for bankruptcy protection in May, when it was behind at least $50M in rent on the more than 30 hospitals it operated across several states. The system planned to sell hospitals to avoid closures.
In Massachusetts, it closed two hospitals after failing to find buyers, and landlords MPT and Macquarie Infrastructure Partners went on to hand over the keys to eight hospitals to lender Apollo Global Management.
After Steward filed a lawsuit against MPT for allegedly interfering in hospital sales, the REIT and operator reached a settlement deal this month to turn over hospital operations to other managers. MPT expects to record $430M in impairment charges this quarter related to Steward.
Meanwhile, Sen. Bernie Sanders, the Senate Committee on Health, Education, Labor and Pensions chair, said Congress “will hold Dr. de la Torre accountable for his greed and for the damage he has caused to hospitals and patients throughout America,” CBS reported.
It is important for the Senate to send a message that even wealthy people who can afford yachts, jets and expensive lawyers are “not above the law,” Sanders said, according to Reuters.
