Washington (June 13, 2024) - Senator Edward J. Markey (D-Mass.), chair of the Health, Education, Labor and Pensions (HELP) Subcommittee on Primary Health and Retirement Security, today led his colleagues, HELP Committee Chair Senator Bernie Sanders (I-Vt.), Senator Sherrod Brown (D-Ohio), Senator John Fetterman (D-Pa.), and Representatives Jim McGovern (MA-02), Seth Moulton (MA-06), Ayanna Pressley (MA-07), and Stephen Lynch (MA-08), in writing to United States Department of Labor (DOL) Acting Secretary Julie Su requesting that DOL support Steward workers and retirees as Steward Health Care proceeds through bankruptcy proceedings. Steward Health Care filed for Chapter 11 bankruptcy on May 6, 2024.
Steward, a for-profit health system headquartered in Dallas, Texas, was founded in Massachusetts in 2010 when Steward, backed by private-equity company Cerberus Capital Management, purchased several non-profit, community hospitals in the state. Steward now operates 400 facility locations and 3,600 staffed beds and employs nearly 30,000 people, in Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania and Texas. 10,000 of these employees are based in Massachusetts.
In the letter, the lawmakers wrote, “We write to ask that the U.S. Department of Labor (DOL) ensure that Steward workers and retirees receive the health care and retirement benefits to which they are entitled. Workers and retirees must be protected from further harm resulting from Steward’s gross financial mismanagement.”
The lawmakers continued, “Amid this torrent of disruption, hospital workers held firm to their commitment to serve the public as they faced overflowing emergency departments, missing medical supplies and uncertainty about their job security. These workers and retirees rely on their wages and benefits for their livelihoods and need clear communication about changes to plan benefits and administration and assurances that their rights are protected throughout this process. DOL must also ensure that workers and retirees receive the wages and health care and retirement benefits to which they are entitled.”
The letter asks DOL to take the following steps:
Monitor Steward Health Care’s compliance with the Worker Adjustment and Retraining Notification (WARN) Act, which entitles workers to 60-day notice in the event of layoffs at large companies. Workers who are not given 60-day notice may be entitled to additional backpay claims in the bankruptcy proceedings.
Ascertain Steward’s plan for continuing benefits during bankruptcy as well as in the event of a facility’s closure or buyout—including identifying plan administrators and trustees of retirement plans—and assist in communicating that plan to impacted workers and retirees, where appropriate.
Secure the availability of information and plan documents relating to health and retirement benefits for all impacted workers and retirees.
Monitor Steward to ensure that paycheck deductions are properly deposited into retirement plans.
Ensure that Steward and its successor entity safely and prudently manage health and retirement benefits throughout the bankruptcy process.
Ensure health claims are paid throughout the bankruptcy process.
Enforce violations of health and retirement benefits to which workers are entitled.
Guarantee that Steward meets all its obligations under the Employee Retirement Income Security Act of 1974 (ERISA), including ensuring that workers are notified within 60 days of any reduction of their health plan benefits.
Support the Pension Benefits Guarantee Corporation in prioritizing defined benefit pensions as creditors, where appropriate.
Remain ready to provide additional support to workers and worker representatives.
On April 3rd, 2024, Senator Markey chaired a HELP Subcommittee field hearing in Boston titled, “When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk” and released his new legislative agenda, including a discussion draft of the Health Over Wealth Act, that calls for transparency and accountability for private equity in health care; protecting patients, providers, and workers; and guaranteeing health care for all. Additionally, Senators Markey and Sanders wrote to United States Department of Health and Human Services (HHS) Secretary Xavier Becerra requesting that HHS stand ready to provide any support necessary to help ensure that no one loses access to care as a result of Steward Health Care’s gross financial mismanagement. On March 7, Senators Markey and Warren sent a letter to Dr. de la Torre requesting financial information, including executive compensation, financial statements, Steward’s arrangement with Medical Properties Trust, repayment of debts to Massachusetts, Steward merger and acquisition activity, and loans from Brigade, Soundpoint, and other lenders in 2023. In February, the Massachusetts congressional delegation sent a letter to Cerberus Capital Management (Cerberus) seeking answers from the private equity firm for its role in creating the current financial challenges at Steward hospitals. In January, Senators Markey and Elizabeth Warren (D-Mass.) led the Massachusetts delegation in a letter to Steward pressing them on their financial position, the status of their facilities in Massachusetts, and their plans to ensure the communities they serve are not abandoned.
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