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

The Boston Globe reported, in a significant move, the Senate Health, Education, Labor and Pensions (HELP) Committee has issued a subpoena to Ralph de la Torre, CEO of Steward Health Care, to testify about the company’s financial collapse. This marks the first subpoena issued by the committee since 1981.

The bipartisan decision to subpoena de la Torre comes after he repeatedly declined to testify voluntarily. The committee, led by Senator Bernie Sanders, aims to investigate the mismanagement that led to Steward’s bankruptcy. Allegations include financial mismanagement, lavish spending, and improper business practices, such as the purchase of luxury items and the distribution of substantial dividends to shareholders.

Steward Health Care, which filed for bankruptcy on May 6, has been under scrutiny for its handling of hospital finances and its impact on patient care. The company, which owns more than 30 hospitals in eight states, has significant liabilities amounting to over $9 billion.

Senator Sanders highlighted Steward’s financial decisions, which included selling hospital properties and borrowing substantial amounts to pay dividends. These actions have raised concerns about the role of private equity in healthcare and its impact on community health systems. Sanders and other lawmakers aim to use de la Torre’s testimony to guide future regulations and prevent similar occurrences in the healthcare sector.

Senator Edward Markey emphasized the need for accountability and transparency, criticizing de la Torre for profiting while patients and healthcare systems suffered. The upcoming public hearing, scheduled for September 12, is expected to shed light on the financial practices that led to one of the largest healthcare bankruptcies in U.S. history.

Steward Health Care has acknowledged the subpoena and expressed its willingness to address the committee’s concerns, emphasizing the transparency of its bankruptcy proceedings.

For more information on the Steward matter or if you have any questions regarding your health care provider, please contact Parrella Health Law at 857.328.0382 or Chris directly at cparrella@parrellahealthlaw.com.

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.)