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Steward Health Care Bankruptcy: Important Considerations for Employed Physicians Involved with Steward Health Care Bankruptcy

As of May 28, 2024: Important Considerations for Employed Physicians Involved with Steward Health Care Bankruptcy

Note: This information is intended to serve as a general resource. No recommendation or endorsement by the MMS for the individual(s) or service(s) listed is expressed or implied. This information does not constitute legal advice. The MMS is not responsible for the recommendations of or the quality of the work provided by any of the parties listed.

It's important to remember that every physician's situation is unique, and the specific steps to take will depend on your contract's terms and circumstances. Seeking legal counsel is helpful to ensure you understand your rights and options throughout the bankruptcy process.

Organizational structures

Steward Health Care System LLC is the sole member of Steward Operations Holdings LLC which in turn is the sole stakeholder of Stewardship Health.
Stewardship Health Inc. (SHI) is the sole corporate member of Stewardship Health Medical Group (SHMG), the sole stakeholder of Steward Health Care Network (SHCN), and an equity holder in related business (Stewardship). Stewardship Health spans nine states and includes primary care, other clinicians, and the physician contracting network.
Steward Health Medical Group (SHMG) employs primary care and various other clinicians who provide care to patients in clinical practice locations across nine states, including Massachusetts.
Steward Health Care Network (SHCN) is a contracting organization that enters into various value-based risk-based and other payer contracts on behalf of medical groups and affiliated private practices.
SHI provides administrative and other non-clinical business support services to SHMG and SHCN.

Employed physicians in Steward

Review your contract and understand your relationship with Steward.
Stay Informed: Read all bankruptcy notices carefully and seek clarification from legal counsel if you have concerns or wish to negotiate. These notices contain crucial information about your contract, including potential assumptions (continue your employment) and assignments (transfer) to a new buyer.
Prepare for Contract Assumption and Assignment: Review your employment contract in detail, paying close attention to any clauses related to assumption (continue your employment) and assignment (transfer) to a new buyer. If your contract requires your consent for a transfer, be prepared to object if you disagree with the proposed buyer. Check your contract to understand what your rights are if you refuse.
Verify Cure Amounts: If your contract is assumed and assigned, ensure that the debtor (Steward) cures any outstanding amounts owed to you under the contract. Begin by identifying what Steward owes you. Be sure to include your retirement plan and any bonus, or other monies owed to you. If you disagree with the stated cure amount, file an objection with the bankruptcy court within the specified timeframe (usually 10 days). You must act quickly to meet the strict deadlines.
File a Proof of Claim (If Contract Rejected): If your contract is rejected and you are owed money, file a proof of claim by the “Bar Date” for any unpaid wages, bonuses, remuneration, or other compensation. Gather supporting documentation, such as pay stubs and contracts. This is essential to ensure you receive any potential payments from the bankruptcy estate. The Bar Date has not yet been set by the Court, but when it is, you will receive notice of that deadline as well as the method to file proofs of claim.
Pension: Contact your pension administrator with any questions.
Deferred Compensation Plan: If you are a participant in one of Steward’s Deferred Compensation Plans, contact the plan administrator or your Steward Human Resources department for more information on how these plans will be handled in the bankruptcy.
If you have a 401K: Be sure to check that Steward has contributed the correct amount over the last several years, also check what they owe and are contributing for the current year and during the correct times of the year.

Additional considerations for all physicians

Personal Service Rights: Be aware that you may have the right to object to the assumption (keep employment) and assignment (transfer) of your contract based on the personal service nature of physician agreements. This may be particularly relevant if you disagree with the proposed buyer or the terms of the assignment. Check your contracts for your rights in these circumstances and consult with legal counsel to determine your ability to object to the assumption of your contract.
Priority Wage Claim: If you are owed wages for work performed within 180 days of the bankruptcy filing, you may be entitled to a priority wage claim up to $15,150. There is a section of the Proof of Claim form where you can identify the priority portion of your claim.
Communication is Key: Remain informed about ongoing activities with Steward, the bankruptcy court, and any potential buyers to ensure that you are aware of developments that may affect your contract or financial interests.
Shared Savings and Incentive Payments: If you are owed money from shared savings programs, quality incentives, or other performance-based compensation, monitor the bankruptcy proceedings for information on how these payments will be handled. Consult with legal counsel, if needed, to understand your options for recovering these amounts. You may need to contact local Steward administrators for details to file proof of claim.
Residency Programs: If you are involved in a residency program, stay informed about the status of your hospital and program. Options could include but are not limited to having the program transferred to a new buyer or reassigned to another sponsoring institution.
Health Plan Contracts: Monitor communications from health plans regarding the status of your contracts with Steward and potential changes that may result from the bankruptcy. Note that each health plan may have different terms and conditions in their contracts which will have implications for your practice.