Feds open investigation into health company that owns several Miami-area hospitals
Federal investigators have opened an investigation into Steward Health Care System, which is in the midst of bankruptcy and is trying to sell all 31 of its hospitals, including eight in Florida.
The criminal investigation, launched by federal prosecutors in Boston, is zeroing in on possible violations of the Foreign Corrupt Practices Act, which prohibits U.S. citizens and companies from committing bribery and other corruption overseas in order to obtain or retain business, according to CBS News, which first reported on the probe. The law also requires companies to keep accurate records of their finances.
“Steward Health Care can confirm it is aware of and cooperating with an investigation by the U.S. Department of Justice,” Steward spokesperson Deborah Chiaravalloti told the Miami Herald in an email Friday. “As a matter of policy, Steward will have no further comment on this investigation as it remains ongoing.”
The U.S. Department of Justice declined to comment. The U.S. Attorney’s Office in Massachusetts said “we do not confirm or deny investigations.”
For the doctors and nurses who care for patients at Steward’s hospitals, many of which cater to underserved communities, the federal investigation marks another blow to a tumultuous year filled with cutbacks and layoffs.
“It’s a tragedy that the situation has deteriorated to clearly dire circumstances inside the facilities for patients, their families and the healthcare heroes trying to provide the very best care under such large looming issues, as well as demoralizing day-to-day challenges such as canceled shifts, lack of equipment, medications and upkeep,” DeQuasia Canales, vice president of 1199SEIU United Healthcare Workers East, said in a statement. The union represents more than 450,000 healthcare workers in the country, including some who work at Steward hospitals in South Florida.
The federal investigation into possible corruption comes as the healthcare giant, which owns several hospitals in South Florida, including Palmetto General and North Shore Medical Center, is also embroiled in a criminal investigation overseas in Malta, an island in Southern Europe, where it managed some state-run hospitals.
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The Boston Globe in June reported that Steward Health’s founder and CEO Dr. Ralph de la Torre and Armin Ernst, the head of its international operations, were accused of being involved in a bribery scheme related to the Malta hospital deal. A court last year struck down the hospital deal “after finding fraud,” and returned the hospitals to the government, according to the Times of Malta.
Maltese authorities, in a report, recently recommended the executives be charged with money laundering, criminal association, and corruption of public officials, though it is unclear if they will be charged, the Globe reports.
Steward Health, which filed for bankruptcy protection in May under Chapter 11 to thin out debt, has also had a long-standing dispute with Massachusetts officials for going against a state rule and keeping its financial information a secret for years. It’s held a similar practice in Florida, where it owns eight hospitals. They include North Shore Medical Center, Palmetto General, Hialeah and Coral Gables hospitals in Miami-Dade, and Florida Medical Center in Broward.
At its hospitals, doctors and nurses have long complained about lack of supplies and broken equipment. In South Florida, North Shore Medical Center, which has seen a series of cutbacks and layoffs this year, is ground zero of Steward’s financial crisis.
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Earlier this year, the North Miami-Dade hospital, 1100 NW 95th St. closed its critical but costly labor and delivery, neonatal, and behavioral health units to try and stop its financial bleeding. In March, another blow for patients: the U.S. Food and Drug Administration ordered North Shore to stop performing mammograms and notify patients that they might have received inaccurate results after a review found images taken in the past two years did not meet standards.
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Miami-Dade Commissioner René Garcia, who represents parts of Hialeah and surrounding areas, said he’s not surprised that Steward’s empire is crumbling. Its expansion, overseas business dealings, feud with Massachusetts officials and for-profit model system drew attention and raised questions and concerns, he said.
The former state senator told the Miami Herald that he’s been in contact with Florida’s Agency for Health Care Administration, which regulates hospitals in the state, to make sure they’re monitoring Steward’s hospitals to “ensure patient quality is not sacrificed.”
“I wish we would do a better job at the federal level or at the state level when we see the acquisition of hospitals, especially safety net hospitals,” said Garcia, who has focused on health policy and other healthcare-related issues throughout his career and considers Palmetto General and Hialeah Hospital to be safety-net hospitals for the community. ”I would hope that in the future, this could serve as a lesson so other communities are not faced with the same situation that Hialeah and Northwest Dade is faced with.”
Canales, the vice president of 1199SEIU, is calling for government officials to help fix the crisis.
“Patients and communities are being put at risk without access to services and care, and our caregivers are facing real financial hardship because they need these jobs to support their own families,” said Canales, the vice president of 1199SEIU, in reference to the problems its members are facing at Steward’s hospitals in South Florida. “We’re urgently calling on Steward, elected officials and now other governmental agencies to find and fix the serious underlying issues that have caused this spiraling crisis…before it is too late.”
This story was originally published July 12, 2024 at 10:57 AM.
