Steward abandons construction of Norwood Hospital, will close four neighboring clinics
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Steward Heath Care has abandoned construction of Norwood Hospital located at 800 Washington St.
Steward Health Care's retreat from Massachusetts is continuing, with the bankrupt company officially moving in court Monday to abandon the under-construction Norwood Hospital property and close four affiliated outpatient clinics nearby no later than Nov. 5.
The news on Norwood Hospital comes after Steward closed Nashoba Valley Medical Center in Ayer in August.
The hospital itself has not been open since a June 2020 flood caused catastrophic damage, but four satellite facilities (in Norwood and Foxborough) have continued to operate under the Norwood Hospital license, according to court documents. That state license expires Nov. 5 and Steward told the court it intends to walk away from what remains in Norwood and the satellite clinics by then.
"The majority of current outpatients will complete their treatment prior to the closure date and, if necessary, provided with information and assistance to make follow-up appointments with replacement providers," Steward wrote in a U.S. Bankruptcy Court filing Monday. "Any patients who need longer treatment will be notified of the anticipated closure and will be transferred, along with their medical record information, to an outpatient clinic in the area or an outpatient clinic of their choice."
The closing satellite facilities are Norwood Performance Therapy and Guild Imaging Center of Norwood Hospital, both in Norwood, and Norwood Hospital Cancer Care Center at Foxboro and "Foxboro," both at the same Walnut Street address in Foxborough. Between the four facilities, patients access oncology care, radiology services and physical therapy.
Restoration work at Norwood Hospital has been idle for months after Steward stopped paying the contractor earlier this year, state officials said. Public officials have proposed ways to continue the Norwood site's use as a medical center and the Healey administration reiterated Monday night that it would like to see a new operator step in to resume health care services there.
Norwood Hospital was not part of the bankruptcy sale that saw two Steward hospitals here close and six other facilities change hands to stay open under new owners. The property has been under the control of Steward's landlord, Medical Properties Trust, and its mortgage lender, Apollo Global Management, for months.
Any developer or hospital operator that might want to finish the construction and reopen the hospital would need first make a deal with MPT and then apply for a determination of need for substantial capital expenditure from the Department of Public Health to demonstrate that the services are needed and to restart construction. A new operator would also have to apply for a new hospital license from DPH, state officials said.
"With this notice of closure, we can now focus on moving forward and meeting the health care needs of the Norwood community without Steward, their lenders or the owners of the real estate dictating the path. We are hopeful that a new, responsible operator will step up, and we're prepared to work with any interested parties," Health and Human Services Secretary Kate Walsh said in a statement Monday night. "Steward must also present us with a closure plan as soon as possible that outlines how they will ensure continued access to care in the community and support the workforce."
Steward's court filing sketches out the rough details of how the four facilities will close. The company has already sent its official closure notice to the state, which will trigger a regulatory process that the state says will include opportunities for public input. Fifteen days before closing, Steward says it will post closing notices at all facility entrances. Ambulatory care would stop one day before the official closing.
The four facilities may have different closure dates: the company said it plans to "adjust the date for cessation of clinical operations at each Satellite as necessary to ensure safe patient care."
State health officials said many Norwood-based physicians have since transitioned to Good Samaritan Medical Center in Brockton, a former Steward hospital newly being run by Boston Medical Center. Patients who want to shift from a Norwood Hospital-based clinic to another provider are encouraged to check on services at Good Samaritan, Morton Hospital in Taunton (a former Steward hospital now run by Lifespan), Sturdy Hospital in Attleboro, and the MGB Health Care Center in Foxborough.
The state said it has already talked to public and private insurers about continuing to cover treatments that are ongoing if a patient needs to switch to a new provider at a different location.
Steward said in court documents that it "intend[s] to attempt to assist employees in finding job placement elsewhere, including by notifying the Massachusetts Department of Labor and Department of Unemployment Assistance." The state said its MassHire Rapid Response team is already working with union representatives to provide services to employees at the closing clinics.
"Norwood Hospital’s healthcare workers and our patients have already experienced so much disruption over the past four years. Our communities cannot afford to have yet another obstacle placed in the way of the high-quality healthcare we all deserve," Tim Foley, executive vice president of 1199SEIU United Healthcare Workers East, said in a statement Monday night. "As Steward leaves Massachusetts, state regulators must ensure a smooth transition process for patients served by Norwood Hospital’s satellite offices in Norwood and Foxborough, and strong protections for any impacted workers if the closure moves forward. As with the closed Steward hospitals in Boston and Ayer, we need a robust, community-led regional commission to shape the future of the Norwood Hospital site and ensure that access to life-saving care is restored."
Insurance Issue
Another filing hit the docket in Steward's ongoing bankruptcy case Monday: an emergency motion from the Executive Office of Health and Human Services and Attorney General Andrea Campbell looking to get a judge to force Steward to make good on its obligations to maintain workers’ compensation and medical malpractice insurance coverage.
"Steward has failed to maintain adequate workers’ compensation for its employees or medical malpractice insurance coverage for its physicians and it appears unprepared to maintain that coverage (and/or tail coverage) now that transitions to new operators have occurred (including, but not limited to, coverage for claims asserted after the sale and transition but arising before closing) as required" by state and federal bankruptcy law, the state wrote in its filing. "Efforts to resolve this issue consensually have failed."
Massachusetts state government is seeking an expedited hearing (by Oct. 25) on its request to have Judge Christopher Lopez force the company to comply with its legal obligations and contractual agreements to provide workers’ compensation and malpractice insurance coverage. A Steward spokesperson did not immediately respond to a request for comment Tuesday morning.
The state said Steward has been honoring its obligations under the bankruptcy process to pay workers' compensation claims, but it has not posted the bond required to cover its self-insured obligations for claims stemming from incidents in 2024. The company in court documents "misrepresented ... that a bond was posted for 2024, when in fact the referenced bond number was for a bond covering 2023 claims," the state claimed.
"Steward’s exit from Massachusetts does not relieve it from compliance with Massachusetts law relating to the provision of workers’ compensation and medical malpractice insurance coverage, and even if it did, Steward explicitly confirmed it would provide both in the asset purchase agreements it executed with each of the acquirers of the hospitals and Stewardship," the state wrote.
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