- [Ian] Jo-Ellen Paterno lives with our family in Warwick.

- I am married to a wonderful man named Paul.

I have three children.

Beautiful.

Lucy is 11, Rosie is six, and Vincenzo is five.

And I'm a school teacher by trade.

I've been a physical education teacher for about 24 years.

- [Ian] Two years ago, during the summer of 2022, things took a turn for the worse and Paterno added a new title; cancer patient.

- I woke up one morning not feeling very well.

I had recently had a diagnosis of cancer, not knowing where it was or you what type - [Ian] Paterno considered her options among local hospitals.

- So I thought, just to make sure that we have all my files together and everything is accessible for everyone, we decided to go to Roger Williams.

- [Ian] Roger Williams Medical Center is located on Chalkstone Avenue in Providence.

It's one of the biggest employers and top taxpayers in Rhode Island's largest city.

It's owned by Prospect Medical Holdings, a private company owned by two senior executives who acquired the majority stake in the outfit from a private equity firm in 2021.

According to its website, Prospect operates 16 hospitals across the US.

In 2014, Prospect swooped in to buy CharterCARE, the parent company of Roger Williams and Our Lady of Fatima Hospital in north Providence.

Both hospitals faced a financial crisis at the time.

Jo-Ellen Paterno says hospital ownership didn't matter to her as a patient.

- Everyone was wonderful.

They were so good to me.

I remember right from getting into the room, the nurse came and greeted me and she said, "Oh, VIP is here!

Our important patient!"

And I was like, "What?"

And she's like, "Listen, we read the backstory of what you're here for, and this is a room we save when people we know are going through hard times."

- Paterno is still waging her fight with cancer and she now gets treated in Boston.

But she says having a well-regarded cancer center just up the road made a huge difference when her condition first developed.

Sounds like you really got what you most needed at at that time.

- Thank God I came to Roger Williams because this wouldn't have happened anywhere else.

- [Ian] Today, Roger Williams and Fatima confront another crisis.

Prospect Medical is trying to sell off its holdings after years of disinvesting in its national chain of hospitals.

The only buyer for Prospect's two Rhode Island hospitals is a nonprofit based in Atlanta, the Centurion Foundation.

- Good afternoon.

My name is Ben Mingle.

I'm the President of the Centurion Foundation.

Our mission today is only about changing the healthcare dynamics in this country.

- [Ian] During a public meeting at Rhode Island College in March, Mingle talked up the foundation's experience.

- To date, Centurion has assisted 13 different not-for-profit health systems across the country, in 25 different transactions, for 36 facilities.

Those facilities total a billion dollars in total financings.

- [Ian] Centurion says it can cut those costs by financing real estate transactions.

Mingle says that cost cutting delivers more than $30 million in annual savings for the foundation's clients.

And he says this strategy gives Centurion the ability to offer a brighter future for Roger Williams Medical Center and Our Lady of Fatima Hospital.

- Our proposal will return local control and independence to the existing management team under.

Centurion's confident in the ability of our management team to convert these hospitals into self-sustainable organizations, which is critical to their long term success.

- Long-term success has been elusive at CharterCARE's Rhode Island hospitals.

Under the management of Prospect Medical Holdings, some longtime employees have left, staffers complaint about the worsening quality of basic supplies like gloves, and Attorney General Peter Neronha last year sued Prospect Medical, accusing it of jeopardizing the financial health of Fatima and Roger Williams and patient care.

So the idea of changing control of local hospitals from a for-profit private equity model to a nonprofit might sound good.

- Well, you feel the stress 'cause you know you're going in at times and you're saying, "Am I gonna have everything I need?"

- [Ian] But Nurses and Allied Professionals, the union that represents hundreds of workers at Our Lady of Fatima and Roger Williams Medical Center opposes Centurion's plan to buy the two Rhode Island hospitals.

- We were optimistic at the beginning when Centurion came forward.

Then we read the business model and realized it's not worth the paper it's written on.

- [Ian] Lynn Blais is president of UNAP.

She's worked as a nurse at Fatima for 40 years.

Blais wants Fatima and Roger Williams to remain open for years to come, but she questions how Centurion can turn losses into profits, particularly since the foundation is not investing any of its own money into the proposed deal.

- Their business model is to come in and borrow money and put us into debt, create bonds.

And the concern is we haven't had a positive bottom line in probably at least six years or more.

We finished in the red every single one of those years.

So how are we gonna come in, borrow money, and then expect to be able to pay that money back plus interest and continue to get a positive bottom line?

So all that's gonna do is guarantee us to go into foreclosure or into receivership or some other way of locking the doors because we're not gonna be able to make those bond payments.

- If there's a worst case scenario and Fatima and Roger Williams, either or both were to close, what would the effect of that be for Rhode Island, for patients, for other healthcare institutions?

- To me, that would be catastrophic.

I don't think the state of Rhode Island can afford for those two hospitals to close.

So if you close the doors to those hospitals, you would send the healthcare system in Rhode Island into a spiral.

- [Ian] A CharterCARE spokesman declined our request for an interview with the head of the Centurion Foundation, Ben Mingle.

In a written statement, Centurion calls its financing plan a traditional method that it has received a so-called high confidence letter from Barclay's Capital.

Centurion says the bonds it plans to sell will provide ample funds to recapitalize the hospital's parent company.

With these and other changes, Centurion says it would be able to compete on a level field in Rhode Island's healthcare market.

- Their model is not to be taken seriously.

It's not credible.

- [Ian] Chris Callaci is the lawyer for United Nurses and Allied Professionals.

- It's not viable.

It won't work.

It doesn't even deserve to be called a business model.

You don't come to Rhode Island from Atlanta to hospitals that are losing $15 million a year and tell them the best way for you to correct the situation is to borrow $133 million from people in the bond market who may not even lend it to you in the first place.

And if they do, have the local hospitals take on that debt instead of Centurion when they can't pay it back.

- Callaci is not the only skeptic regarding the Centurion Foundation's proposal to buy Fatima and Roger Williams.

Rhode Island's Department of Health and Attorney General's Office have to approve the sale.

Through a public records request, we unearthed a letter from the Department of Health to Centurion.

It questioned how the nonprofit would make the Rhode Island hospitals sustainable and noted that it has no experience running healthcare facilities.

The company's response has not been made public.

Attorney General Peter Neronha has shown a willingness to play hardball when it comes to regulating healthcare.

In 2021, he conditioned the change in the ownership of CharterCARE's parent, Prospect Medical Holdings, on the creation of an $80 million escrow account.

Neronha criticized how Prospect Medical a few years earlier directed almost a half billion dollars in dividends from its national chain of hospitals to top executives and other investors.

And he says, even with Centurion's proposed takeover, Fatima and Roger Williams could still close.

- You have a proposed transaction, which may ultimately lead to an insolvency event, even if we were to approve it.

- [Ian] Last year, Prospect fell so far behind in paying vendors that a number of elective surgeries were canceled at its Rhode Island hospitals.

And Neronha's lawsuit against the company is still pending.

He says broader problems with healthcare in Rhode Island complicate the outlook.

- Unless something dramatically changes around the way Rhode Island healthcare is structured, the way reimbursements are done, Medicaid, Medicare, and commercial insurance, those are the three components of revenue.

If these hospitals can't make enough revenue to pay that debt financing and break even and reinvest back into themselves, then they're gonna be in a tough spot.

- [Ian] The Centurion Foundation is the only potential buyer right now of the CharterCARE hospitals, but Neronha says if a neutral third party was in charge of seeking offers rather than current owner Prospect Medical, there might be more interest.

- Look, my faith in Prospect is zero.

When I say that these hospitals would be closed, those aren't empty words.

This same company as closed hospitals where regulators haven't had the ability to stop them.

I, we, have been able to stop them by what is the crudest mechanism to do that.

We hold their money and they're not getting it back unless they keep them open.

- [Ian] Neronha and the Rhode Island Department of Health are slated to make their decision on Centurion's application by June 11th.

The Attorney General says he has serious concerns about Centurion's proposal to use $160 million in debt with half of that going to buy Fatima and Roger Williams.

- I can't say to the people of Rhode Island that these hospitals are gonna be in a good place.

I just can't.

I can't promise them that.

No matter what we do vis-a-vis this transaction, we're really choosing potentially between a really bad spot and one that may not hold great promise even if we were to approve it with conditions.

- And you can hear more