Prospect Medical Holdings-owned Crozer Health plans to start closing facilities following a lengthy, but unsuccessful, battle to secure a buyer.
Prospect Medical filed a motion Monday asking the U.S. Bankruptcy Court for the Northern District of Texas for an emergency hearing to approve an expedited closure for Upland, Pennsylvania-based Crozer's hospitals and outpatient facilities.
Related: Crozer Health CEO Tony Esposito to step down
Crozer plans Wednesday to start diverting emergency cases to other facilities and to stop elective inpatient admissions, in addition to trauma, surgical, OB-GYN, burn, behavioral health, oncology and outpatient services. Next Monday, Crozer plans to close all ambulatory services, according to court documents.
Prospect said in court documents there are potential buyers for certain assets, including the ambulatory surgery centers and imaging sites at Crozer Medical Plaza at Brinton Lake, Crozer Health at Broomall, Media Medical Plaza and the Surgery Center at Haverford. A spokesperson said those facilities will remain open for now.
"[Prospect] recognizes the impact this action will have on patients as well as team members. We’ve worked tirelessly with the Pennsylvania Attorney General and other parties to do everything possible to prevent this outcome. Unfortunately, we were unable to reach a viable alternative," the spokesperson said.
Crozer's assets include four hospitals, several outpatient centers and a physician network for primary and specialty care. Only two hospitals — Crozer-Chester Medical Center and Taylor Hospital — were still providing hospital-based services.
Prospect filed for Chapter 11 bankruptcy protection in January. State officials and community members have scrambled for months to find a buyer for the struggling Crozer. Real estate company CHA Partners agreed to buy Crozer in 2024, but the deal did not come to fruition.
In February, Prospect was given court approval to hand Crozer operations over to a state-backed receiver in an attempt to avoid closures. It transferred operations to FTI Consulting. On April 10, the Pennsylvania attorney general's office said funding had been secured to keep the facilities open for another week.
Delaware County, the Commonwealth of Pennsylvania and the Foundation for Delaware County came up with a collective $40 million lifeline in recent weeks to keep Crozer open while Prospect found a buyer, according to a news release from the Delaware County Legislative Delegation, a group of Pennsylvania lawmakers. Penn Medicine also gave $5 million and took over leases for some of Crozer's medical offices.
Ultimately, the cash ran out.
The delegation called Prospect's decision to close the facilities a "devastating and disgraceful blow."
Prospect's alleged mismanagement "created a nearly impossible situation for any nearby health system to take on without jeopardizing their own financial and patient health," the delegation said in the release.
"At a time when the federal government is planning massive cuts to Medicaid and Medicare and when most hospital systems are already in the red due to below-cost reimbursement from those public payer programs, bailing out Crozer became a problem without a solution," the delegation said.
The bankruptcy court has scheduled a hearing on Wednesday afternoon.
