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Prospect Medical Holdings, the parent company of Crozer Health, is set to receive a $450,000 settlement from the Chester Upland School District (CUSD) stemming from a 2018 legal dispute over property taxes.
This comes as the four-hospital system in Delaware County faces a period of uncertainty over its viability.
The company first filed a petition with the Delaware County Court of Common Pleas against the City of Chester Board of Assessment Appeals for incorrectly assessing several properties and denying appeals.
The Chester Upland School District (CUSD) intervened in the case as the taxing authority that would be affected by any change in the appeals.
Prospect was eventually successful in reducing the value of several of the parcels, so it sought to recoup the money.
The court found that CUSD owed Prospect north of $700,000.
They filed similar petitions for relief with the court on the basis of the fact that they are both under receivership due to being financially distressed. Because of their money issues, the city and school district argued that any payments made to Prospect should be delayed.
CUSD even pushed for a 10-year repayment plan.
In October 2019, Delco Court of Common Pleas Judge John Braxton found that the city owed Prospect approximately $340,000. The city was ordered to pay roughly $115,000 in each of the following years towards that amount.
Chester ended up not making any payments. However, in May 2021, Prospect filed a petition to get the courts to compel the city to pay. Since then, the legal battle has found its way to court once more.
Michael Doweary is the state-appointed receiver whose job it is to save Chester’s finances as it faces the possibility of bankruptcy. Vijay Kapoor is Doweary’s chief of staff, and he said the receiver is “desperately” trying to prevent bankruptcy while providing vital services to city residents.
He added that getting “hauled” into court is not helpful to their mission.
“We understand that Prospect believes that it’s entitled to this amount of money. But from the perspective of the receiver, it’s not coming at a very good time and it makes his job just that much more difficult,” Kapoor said.
WHYY News reached out to Kevin Spiegel, Crozer’s chief executive officer, for comment but did not immediately receive a response.
The city took the position that Prospect also owed it $195,000 for property taxes on a different property.
As Delco officials unveiled legislation on June 16 regulating for-profit hospitals in Pennsylvania at the county courthouse in Media, at the same time – and in that same building – Prospect reached a $450,000 settlement with the school district.
“What the receiver agreed to do on the city’s behalf was to make a payment of about $34,000 within 60 days to Prospect,” Kapoor said.
The next payment is not due until November. The city and Prospect will likely be back in court once again.
As if the city didn’t already have enough on its plate, Crozer Health has been having conversations with the city’s fire commissioner regarding the payment for paramedic services.
Back in April, the four-hospital system in Delaware County began quietly reaching out to municipalities, threatening to shut off emergency medical services unless they pay up. While Chester hasn’t received its own warning letter from Crozer just yet, the conversations are ongoing.
Recalling his own past at a large law firm, Kapoor called Prospect’s tactics “extremely, extremely aggressive.”
“With respect to this court matter, as well as to this matter of trying to to pay the money back … I’ll say this, both for the city and I think the same experience has been for the school district — Prospect-Crozer has aggressively pursued this money,” Kapoor said.
He added that they have a right to this strategy, but that it is not helpful for Chester’s recovery.
“The $450,000 the Chester Upland School District had to pay, the $34,000 the city of Chester is going to have to pay to Prospect-Crozer is money that is coming straight from the residents of the city of Chester who cannot afford it — and it’s not helpful in the slightest,” Kapoor said.
WHYY News reached out to the school district for comment, but a spokesperson for CUSD officials said that they had no comment due to pending litigation.