New Crozer owner Prospect target of hearing
Concerns grow over pension, tax payments
UPPER DARBY » State and local officials and union representatives are hosting a community hearing at the Drexelbrook Wednesday evening to listen to concerns about Prospect Medical Holdings Inc., the new owner of the Crozer-Keystone health care system, and the contention they are not paying required pensions to employees and taxes to local school districts. Prospect strongly denies the claims.
State Sen. Tom McGarrigle, R-26 of Springfield, Delaware County District Attorney Kat Copeland, state Rep. Leanne KruegerBraneky, D-161 of Swarthmore, county Councilman Kevin Madden and the Pennsylvania Association of Staff Nurses & Allied Professionals are sponsoring the event to talk about the pension situation.
“While it’s not surprising that a billion-dollar company broke the law, we are disappointed and angered that they continue to be bad actors for our patients and our community,” said Angela Neopolitano, president of the Delaware County Memorial Hospital Nurses Association, said. “Prospect must respect us so we can get back to what we do best as nurses and techs: save lives!”
Recently, the National Labor Relations Board ordered Prospect Medical Holdings Inc. to provide PASNAP with a full copy of the asset purchase agreement for the Crozer-Keystone Health System that closed July 1, 2016. At issue are the six months from July through December of 2016. The union claims that in order to qualify for certain pension benefits in that system, an employee would have had to work 1,000 hours in that time.
Event organizers also contend that Prospect has failed to pay $3 million in tax payments to the Ridley, Upper Darby and Springfield school districts.
Representatives for Prospect deny the claims and say the hearing was set up as a promotional tool by the union.
“We were not invited to participate in this listening roundtable, which shows it was never intended to be a true discussion but rather a one-sided promotional event for PASNAP,” said a statement released by Andrew Bastin, assistant vice president of Marketing and Corporate Communications. “This is a union-orchestrated event that in no way reflects the tremendous progress Crozer-Keystone has made since becoming a part of Prospect.”
The system includes the CrozerChester Medical Center in Upland; Community Hospital in Chester; Delaware County Memorial Hospital in Upper Darby; Taylor Hospital in Ridley Park; and Springfield Hospital in Springfield, as well as the Healthplex Sports Clubs and various outpatient centers and a physician network.
System officials contend they’ve made all the proper payments.
“Prospect Medical Holdings has delivered all appropriate payments to its employee pensions and retirement plans,” the released statement read. “Prospect has contributed in excess of $130 million to continue to turn around Crozer-Keystone Health System’s at-risk defined benefit pension plan, which covers many thousands of current and former employees and Delaware County residents.”
It continued, “Over the past 21 months, Prospect has demonstrated its commitment by honoring its financial obligations to Crozer-Keystone, its more than 6,000 employees and the community. This includes acquiring new equipment and technology, improving safety and security, and launching new programs and services that benefit the community.
“In addition,” it concluded, “Prospect has made significant investments in the strategic expansion of the Crozer-Keystone physician network and its ambulatory facilities. Prospect’s investment has enabled Crozer-Keystone to recruit top physicians and hundreds of talented new employees to the health system.”
Yet, Prospect has faced various legal challenges since it took the Crozer helm.
A dispute with the Crozer-Keystone Health System and the Crozer-Keystone Community Foundation ended in an arbitrator’s decision in November that placed the final purchase price of the system at $56.6 million. In January 2016, Prospect agreed to a $300 million asset acquisition of the Crozer-Keystone system that included a cash payment of $52.9 million due at the July closing.
Prospect paid $20 million at closing, and another $12.9 million was made within 130 days after the closing, but another $21 million was to go into an escrow account, which Crozer representatives said was not opened.
Last month, Commonwealth Court also reaffirmed a lower court’s decision that Springfield Hospital can be taxed since Prospect Medical is a for-profit entity.
Wednesday’s hearing begins at 5:30 p.m. and will be held at the Drexelbrook Corporate Events Center, 4700 Drexelbrook Drive in Drexel Hill.