By: Christopher A. Parrella, Esq., CPC, CHC, CPCO 
Parrella Health Law, Boston, Ma. 
A Health Law Defense and Compliance Firm

In a significant development that underscores the importance of financial transparency and accountability in the healthcare sector, Massachusetts Governor Maura Healey has taken a firm stance against Steward Health Care, the nation’s largest private, physician-led healthcare network. This action comes after the for-profit health system faced intense scrutiny from public officials and the community for its failure to disclose critical financial information and ensure the stability of its operations within the state.

Governor Healey’s directive, delivered through a pointed letter to Steward Health Care’s CEO Dr. Ralph de la Torre, mandates the immediate provision of audited financial documents within a three-day timeframe. The governor’s ultimatum is clear: Steward Health Care must either demonstrate its financial viability through transparency or begin the process of transitioning its Massachusetts-based healthcare facilities to new operators as swiftly as possible.

This decisive move is a response to Steward Health Care’s ongoing financial troubles, including approximately $50 million in debt owed to landlords, numerous lawsuits from vendors and employees over unpaid bills, announcements of facility closures, and operation on a “shoestring” budget. These issues have not only raised alarms over potential disruptions to patient care but have also painted a stark contrast between the health system’s financial struggles and the lavish lifestyles of its top executives, including Dr. de la Torre.

Governor Healey’s letter also highlights the state’s active engagement with Steward Health Care to preserve access to healthcare services amidst the company’s financial turmoil. The Massachusetts Department of Public Health and the Centers for Medicare & Medicaid Services have been conducting onsite visits to Steward’s hospitals in response to patient safety concerns. However, the governor criticized the health system’s lack of transparency and cooperation, stating that the absence of clear and truthful communication about its financial status and contingency plans jeopardizes the state’s ability to protect its residents and healthcare workforce.

The governor’s message to Steward Health Care is unequivocal: the company must ensure adequate staffing and supply levels at its facilities to avoid state intervention, which could include freezing admissions, closing beds, and transferring patients to other hospitals. Furthermore, Steward is expected to comply with expanded monitoring by the Department of Public Health across all its Massachusetts hospitals.

Governor Healey’s firm stance serves as a cautionary tale for healthcare providers about the critical importance of financial transparency and accountability. It underscores the government’s commitment to safeguarding patient care and the wellbeing of the healthcare workforce. As Steward Health Care faces the possibility of relinquishing control over its Massachusetts facilities, the healthcare community watches closely, recognizing the broader implications of this standoff for healthcare systems nationwide.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)