BROOKLINE, Mass. — Steward Health Care employees faced delayed paychecks on Thursday due to a “processing error” following the company’s recent bankruptcy filing. The Texas-based company, known as the third-largest hospital system in Massachusetts and a major state employer, sought legal protection to restructure its debt while keeping its hospitals operational.
Several Steward employees reported not receiving their paychecks early on Thursday, attributing the delay to a “processing error within the Bank of America system,” as conveyed in a message from Steward Health Care President Mark Rich. Rich reassured employees that payroll and benefits have been funded and should reflect in their accounts within the next 24 hours, expressing regret for any inconveniences caused by the situation.
To address concerns arising from the delayed paychecks, Massachusetts Attorney General Andrea Campbell’s office appointed a Patient Care Ombudsman to support both patients and employees during the bankruptcy proceedings. A statement from the Executive Office of Health and Human Services acknowledged the delay, assuring that employees could expect their pay by Thursday or Friday.
Steward Health Care’s financial troubles came to light this year with revelations of owing approximately $50 million in unpaid rent. Amid the bankruptcy proceedings, the company closed one facility and expressed intentions to sell other holdings. Court documents indicated Steward’s substantial liabilities, including outstanding loans, rent obligations, bills from vendors and suppliers, and unpaid employee wages.
In efforts to address these financial challenges, Steward’s lawyer outlined a timeline for the sale of most hospitals outside of Florida. Auctions for these hospitals were scheduled for late June and July. The company emphasized that day-to-day operations would continue without disruption despite the bankruptcy filing, aiming to ensure ongoing care for its communities.
In response to the crisis, Massachusetts officials activated an “Emergency Operations Plan” and held private discussions with local health care leaders to navigate uncertainties surrounding the Steward situation. Health and Human Services Secretary Kate Walsh emphasized the importance of preparation to mitigate potential disruptions, acknowledging the preparation for a potential bankruptcy filing.
Steward’s ongoing efforts to navigate its financial challenges highlight the complex landscape of healthcare systems and the importance of maintaining services for patients and communities. Despite the hurdles presented by the bankruptcy filing, Steward is working to uphold its commitment to providing essential care while addressing its financial obligations.