After suing over an alleged $20 million debt, a Delaware County health foundation has reached a settlement with Prospect Medical Holdings, Inc.
Following hearings at the Delaware County Courthouse earlier this week, the two sides have agreed to resolve their dispute out of court.
“With the judge’s encouragement, Prospect agreed to escrow the $21 million the community has been owed for the last nine months,” said Crozer-Keystone Community Foundation president Frances Sheehan.
An audit of the health system, which comprises five hospitals and satellite practitioners’ offices, was already conducted by Ernst and Young. Now, an audit review will determine whether the value of the health system, Crozer-Keystone Health System, needs to be adjusted.
Most of the sale price went to paying down debt accrued by the hospital chain, but the remaining $53 million was earmarked for the Crozer-Keystone Community Foundation, a nonprofit which runs programs including Healthy Start and WIC.
Prospect finalized its acquisition of the Delaware County health chain last year. Since then, the California-based company has come under fire from the Pennsylvania Association of Staff Nurses and Allied Professionals.
During contract negotiations, nurses and technical staff held protests, raising concerns about unsafe staffing levels, which Prospect has disputed. The Delaware County health system employs 6,000 people, including more than 1,000 doctors.
Both Prospect and the Foundation greeted the settlement as a positive.
“Prospect strongly believes that it has met all its obligations under the asset-purchase agreement,” said Prospect spokesman Grant Gegwich in an emailed statement earlier this week. “We look forward to resolving our dispute with the Crozer-Keystone Foundation through the arbitration process, which was agreed to by both the foundation and Prospect.”
Follow-up questions about whether the arbitration refers to the audit review were not answered.