A law signed by Governor Daniel J. McKee on June 18 gives Rhode Island regulators a fast lane to approve hospital sales when a hospital is in bankruptcy or court-supervised insolvency, compressing a review that ordinarily runs months into a 90-day verdict.
S2339, the amendment to the state's Hospital Conversions Act, cleared both chambers with a rarity in Rhode Island politics — near-total unanimity. The Senate passed it 38-0 on June 3, and the House concurred 69-0 on June 8, with six members not voting. The measure carries a built-in expiration: it lapses one year after passage, in June 2027, unless lawmakers renew it.
The law exists because of a crisis in Providence and North Providence. Prospect Medical Holdings, the California-based operator of Roger Williams Medical Center and Our Lady of Fatima Hospital, filed for Chapter 11 bankruptcy in January 2025 after what Attorney General Peter F. Neronha and McKee have characterized as severe mismanagement — the two hospitals had grappled with canceled surgeries, missing equipment, and federal health and safety violations under Prospect's ownership.
Local sponsorWorld-class website design at a small business priceCompany 50The stakes are measured in beds and jobs. Roger Williams and Fatima together hold more than 400 hospital beds, 104 of them designated for behavioral health patients — more than 20 percent of the behavioral health beds available statewide. Their operators employ roughly 2,400 people, including nurses and physicians whose departure a closure would likely trigger.
A nonprofit buyer, The Centurion Foundation, won conditional approval to take over the hospitals in June 2024, when the Attorney General's office and the Department of Health attached 85 conditions to the $80 million deal. A federal bankruptcy judge authorized the sale in February 2025. But by late 2025, Centurion had been unable to secure the $150 million in bond financing needed to close, despite repeated revisions to the state's conditions.
That unresolved gap is what the new law anticipates. In consultation with legislative leadership, McKee and Neronha announced in January that if Centurion fails to close and an alternative purchaser emerges, the state would need a faster path to vet that buyer. The expedited process applies only to sales tied to bankruptcy, receivership, or special mastership — not routine hospital mergers.
State officials insist speed does not mean surrender of oversight. Any application filed under the expedited path, according to Neronha's office, still faces full Hospital Conversions Act review and approval by both the Attorney General and the Department of Health. Under a framework in place since 1997, transfers of 20 percent or more of a hospital's ownership, assets, or control require that dual sign-off, weighed against nine statutory criteria — among them the buyer's character and competence, safeguards for continued access to affordable care, protections for underserved populations, and a commitment to preserve collective bargaining rights and retain the workforce.
Whether those criteria hold up under a 90-day clock is the question the law leaves open. The full statutory text of the procedural changes beyond the deadline could not be independently reviewed, and there is no record yet of the expedited process being used.
The conditions imposed in the Centurion case suggest the leverage regulators mean to keep. Neronha's office lowered the deal's cash-on-hand requirement from $80 million to $45 million but demanded Centurion close a $35 million shortfall within 90 days, invest $50 million in capital improvements, and granted the office authority to petition to place the hospitals into receivership if terms are not met.
Organized labor's posture has shifted with the crisis. The United Nurses and Allied Professionals, which represents more than 1,200 CharterCARE workers, initially voiced doubts about Centurion's inexperience running hospitals and its reliance on debt financing. Those concerns eased once Prospect filed for bankruptcy and state receivership powers came into play — a backstop the union viewed as protection against the alternative of closure.
Dr. Jerry Larkin, the state health department director, has warned that shuttering the two hospitals "would overwhelm RI's healthcare system and create significant barriers to care for individuals already facing profound health disparities." The law's real test will arrive only if Centurion collapses and a replacement buyer must be judged against the clock.