Prospect Medical Holdings’ dire financial straits were well-documented, even before the owner of Roger Williams Medical Center and Our Lady of Fatima Hospital declared bankruptcy on Jan. 11.

But its cash flow woes are even worse than previously aired in public. The national hospital chain operator owes more than $1 billion to more than 100,000 creditors, but has just $3.4 million cash on hand, Paul Rundell, Prospect’s chief restructuring officer, wrote in testimony ahead of a federal bankruptcy court hearing in Dallas on Tuesday.

“It is my understanding that, without post-petition financing, the Debtors will be unable to meet their next payroll cycle,” Rundell wrote in the Jan. 13 filing.

Prospect declares bankruptcy, says sale of Roger Williams and Fatima hospitals will continue

Even Chris Callaci, who represents the 1,200 United Nurses & Allied Professionals members who work for Prospect’s Rhode Island facilities, was taken aback.

“That was more grave than we thought in terms of a brush with disaster of not making payroll,” Callaci said in an interview on Wednesday. “We thought they had access to a little more capital.”

The 12,500 Prospect hospital employees, including the 2,500 in Rhode Island, will get their next paycheck, after a federal bankruptcy judge in Dallas authorized a $100 million line of credit on Tuesday.

Not that it offered much assurance to Rhode Island Attorney General Peter Neronha, whose office has been keeping close tabs on Prospect’s management of Roger Williams and Fatima for the last decade. Anticipating the potential for bankruptcy, Neronha’s office also brought on New York bankruptcy attorney Andrew Troop last year; Troop attended the hearing in Dallas Tuesday on the AG’s behalf.

“We wanted to be ready,” Neronha said in an interview on Wednesday.

In search of investors

But the proactive approach may not be enough to save Rhode Island’s safety net hospitals, whose fates hinge on their cash-strapped owners’ ability to drum up the money to sell the facilities. The $80 million sale to The Centurion Foundation was expected to close this month, following a yearslong application and review process, which included a set of 85 conditions set by state regulators.

Both Prospect and Centurion insist they still intend to go through with the deal, using a clause in federal bankruptcy code that allows debtors to sell certain assets through private sale, according to court documents.

But first, they have to finish securing the $160 million in financing — $80 million for the sticker price of the sale plus another $80 million injected directly into hospital operations — required by state regulators. Neronha said Wednesday the companies had not finished raising the funds required.

Callaci doubted Prospect would be able to entice investors, given its bankruptcy declaration, and feared the company would ask state regulators to ease up on the financial strings attached to the sale.

Neronha maintained that his office did not intend to change its conditions. Joseph Wendelken, a spokesperson for the Rhode Island Department of Health, said in an email Wednesday that the agency was “committed to ensuring the hospitals have new ownership.”

Dr. Jerry Larkin, state health director, stressed the importance of keeping Roger Williams and Fatima open in pre-filed testimony to the federal bankruptcy court. The two hospitals, with 500 beds between them, account for more than 50,000 emergency room visits per year. Together they have 104 beds for behavioral health patients, representing more than 20% of behavioral health beds available statewide.

“It is certain that an abrupt closure of RWMC and/or OLF will disproportionately impact vulnerable and underserved populations, creating deeper inequities in access to care,” Larkin wrote. “The closure of these RI safety net hospitals would overwhelm RI’s healthcare system and create significant barriers to care for individuals already facing profound health disparities.”

Surgeries rescheduled

Not that operations have been running smoothly now. Rundell testified in bankruptcy court Tuesday that the company also owes millions of dollars to vendors at its 16 hospitals, forcing delays in surgeries, according to news reports.

Otis Brown, a spokesperson for CharterCARE Health Partners, Prospect’s Rhode Island subsidiary, confirmed in an email Wednesday that two spine surgeries scheduled for that day in Rhode Island had been moved to Monday, Jan. 20 because a vendor “unexpectedly requested pre-payment.”

“We are actively working with them to resolve it,” Brown said of the payment problem, adding that the rescheduling of surgeries was “without incident.”

It’s not the first time the hospital operator let bills at its Rhode Island hospitals pile up. In November 2023, Neronha’s office sued Prospect for missing $24 million in payments to vendors at Roger Williams and Fatima, forcing elective surgeries to be canceled due to lack of staff, supplies and equipment. Paying its bills on time and keeping day-to-day operations running was one of a host of conditions set by Neronha’s office in 2021, when Prospect’s ownership composition changed.

A Providence Superior Court judge sided with Neronha, demanding Prospect fork over the longest overdue vendor payments — $17 million — and blasting the company for using its Rhode Island hospitals as a “line of credit” to pay off debts elsewhere. A Prospect executive confirmed it had paid the $17 million balance as of July, but in November, filed a new affidavit that the company again let bills pile up beyond the 90-day payment deadline.

Prospect intended to rectify the late payments by the time its pending sale of Roger Williams and Fatima to The Centurion Foundation closed at the end of January 2025, George Pillari, Prospect’s senior vice president and chief performance officer, wrote in the Nov. 15 Rhode Island Superior Court filing.

“For years, they’ve been playing this game of slow walking on paying their bills, gimmicks like that to save a buck,” Callaci said. “Our guys consistently, for years, have been telling us it’s a struggle to do their jobs in a timely fashion.”

Union members who work at Roger Williams and Fatima had not indicated that daily operations had worsened in recent weeks, Callaci said.

While the union railed against the pending sale to Centurion, citing the debt financing used to fund the deal and Centurion’s lack of experience, Callaci now considers hospital closure a worse outcome.

McKee ‘missing in action’

Potential buyers were few when Prospect first sought interest in 2023. And Neronha isn’t hopeful that the pool will be larger now, given Rhode Island’s uncompetitive reimbursement rates relative to neighboring states, and his criticism of Gov. Dan McKee.

McKee attempts to rally his team in 2025 State of the State

McKee in his 2025 State of the State Tuesday night acknowledged Prospect’s financial crisis with a single line, saying he was “in conversations” with Prospect and Centurion executives.

Neronha, who sat in the front row for the packed State House event, called McKee’s statement “meaningless.”

“I don’t know what he’s talking about,” Neronha said Wednesday. “He’s not involved in any talks with Prospect.”

Callaci blasted McKee for being “missing in action.”

“He ought to be making unequivocal affirmative commitments to the 2,500 to 3,000 people who work in that system and the tens of thousands of people who use those facilities,” Callaci said. “He’s chief executive officer of this state. It is his job to do the job.”

Olivia DaRocha, a spokesperson for McKee’s office, offered further explanation on McKee’s State of the State remarks in an email Wednesday.

“Discussions have centered on a potential carve-out for Prospect’s Rhode Island facilities and ensuring that the sale of Roger Williams and Fatima moves forward,” DaRocha said.

She did not respond to requests for comment on criticisms of the governor made by Callaci and Neronha.

A second hearing on Prospect’s request for short-term financing is set for Feb. 12 in federal bankruptcy court in Dallas.

Updated to include comment from Gov. Dan McKee’s office and from the Rhode Island Department of Health.

Rhode Island Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Rhode Island Current maintains editorial independence. Contact Editor Janine L. Weisman for questions: info@rhodeislandcurrent.com.

A rise in food prices makes for a less than merry holiday season.

Grocery prices rose 0.4% in November, according to the Consumer Price Index, released this week by the U.S. Bureau of Labor Statistics.

Eggs made one of the biggest jumps at 8.2% over the month, and 37.5% over the past year, providing challenges for people trying to eat a somewhat cheaper protein and families cooking holiday foods such as sugar cookies and challah.

Although the increase in food prices has moderated a bit from past years, they are still more than 20% higher than they were before the pandemic, according to David Ortega, at Michigan State University.

“It was a key issue in the election in terms of people really feeling that sticker shock at the grocery store,” said Ortega, a food economist.

Price changes to understand before you set the holiday table

The increase in grocery, or food at home prices, was partly driven by the rise in egg and beef prices, Ortega said. He said the price of holiday roast has been affected by drought and high feed prices. This year, the inventory of beef cattle was the smallest beef herd since 1951.

“On eggs, the story continues to be bird flu together with increased consumer demand given the holiday season,” he said following Wednesday’s release of the latest Consumer Price Index. “And for beef the issue is supply — high input costs and decisions that beef producers made a couple of years back when they were facing drought and high feed prices which has reduced beef supply, and this in turn is affecting beef prices.”

The latest food price numbers presented a mixed bag for holiday shoppers looking to bake treats this month. Flour and prepared four mixes fell 1% and bread decreased 1.3%, while sugar and sweets rose 0.2%, and butter ticked up 1.5%.

Oranges, including the popular stocking stuffers tangerines, fell 1.8% in the latest Consumer Price Index report.

The rise in cost of eating your meals at home compared to the rise in cost of eating out is also getting narrower, with the gap in inflation between restaurant menu prices and grocery year-over-year prices being the narrowest it has been since May 2023, according to Supermarket News. Food at home in previous reports rose 0.2% and 0.4% compared to 0.2% and 0.3% for the past two food away from home reports.

Are companies profiting off of uncertain times?

Rakeen Mabud, chief economist at the Groundwork Collective, a left-of-center economic think tank, said that just a few seed producers, meatpackers, and grocers dominate the food industry, which is a key part of the story of what drives grocery prices. This hurts lower-income shoppers the hardest. Oklahoma, Iowa, and Arkansas are some of the states most dominated by a single grocer, such as Walmart or Hy-Vee.

“Across the food and grocery industry, we have a sector that is deeply consolidated,” Mabud said. … And so when you have big companies controlling such large chunks of the market, we know that they have used things like inflation, things like supply chain shocks to jack up prices far beyond what their input costs to justify.”

Mabud said that when there is this level of market concentration, companies can signal to each other in earnings calls that they are going to start raising prices.

“If you know that your only other competitors are also raising prices, there’s kind of no reason for you to try to undercut them if you both hold giant shares of a market,” she said.

A 2024 economic paper found that companies are able to coordinate price increases around cost shocks and increase profits from these events. Mabud said the holidays provide plenty of opportunity for the food industry to raise prices on things people ordinarily don’t buy and don’t have a price comparison for during a less in-demand season.

“Grocers and the food industry kind of know that they know that they have more information about the underlying cost of a good than a consumer who only comes to buy the Christmas ham once a year. And so they can take advantage of that,” she said.

An unhappy new year for grocery shoppers

Economists are watching out for how the next administration will impact food prices.

President-elect Donald Trump’s promise to impose heavy tariffs on the U.S.’s biggest trading partners – Mexico, Canada and China – are expected to drive up the cost of everything, including groceries.

Products the U.S. can’t produce year round, like fruit and coffee, will be affected, Ortega said.

“There’s still a lot of uncertainty in terms of whether these tariffs are really going to be implemented or are they a negotiating tool? But that creates a lot of uncertainty,” he said. “Even that amount of uncertainty can lead to a rise in costs as companies prepare for the potential of these tariffs taking place.”

Trump’s expected policy of mass deportation of immigrants will also affect the agriculture industry, in addition to the major human rights implications.

“If there’s a mass deportation that is a shock to the labor supply and the agricultural sector. And that will lead to an increase in costs as producers and companies have to offer higher wages to attract enough labor. Ultimately that gets passed down to the consumer in the form of higher prices,” Ortega said.

Mabud is also concerned that expected tariffs could mean companies take advantage of the policy change well beyond the actual financial impact to their business.

“It’s a policy change where consumers don’t necessarily know how much the price of an avocado is going up because of a tariff versus a supply chain issue versus the grocery store just wanting to increase the price,” she said.

Patricia “Pogo” Overmeyer, 65, who works as a lawyer in Arizona and lives with her retired husband, said she has always been focused on how to save money on groceries. But she said she has become even more thrifty since inflation worsened.

She said she’s been using more meatless meals and stocks up on holiday food all year round when prices are low, some of which she freezes and cans.

“Once I retire, our income will not be as high,” she said, “Most likely I will forgo some foods or make substitutions. It’s anyone’s guess as to what we will be paying for groceries.”

Rhode Island Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Rhode Island Current maintains editorial independence. Contact Editor Janine L. Weisman for questions: info@rhodeislandcurrent.com.

Campaign materials for Giona Picheco’s run for the District 14 seat in the Rhode Island House of Representatives described her as a child of working-class parents, first-generation college graduate, U.S. Navy veteran, and community activist.

Her incumbent opponent zeroed in on something else.

Mailers sent from Democratic Rep. Charlene Lima’s campaign a few weeks before the Sept. 10 primary called Picheco a “left-wing extremist” with “radical ideas.” Bullet points claimed Picheco “supports teaching SEX for pleasure in grammar school,” and “wants biological boys who identify as transgender girls to play in all girls sports.”

The allegations were accompanied by a circa-2020 photo of Picheco, taken from her personal Facebook page. She looks similar to her present-day appearance, but with shorter hair.

“I wasn’t personally offended,” Picheco said in an interview. “I like that photo of me. But I knew exactly what she was implying. She wanted to frame me as if I am actually a man.”

Picheco lost the Sept. 10 Democratic primary in the district covering northwest Cranston and Providence’s Silver Lake neighborhood by 20 percentage points, with fewer than 700 votes cast according to results from the Rhode Island Board of Elections. Lima was unopposed in the Nov. 5 general election.

It was a longshot candidacy, even in Picheco’s second battle against Lima, who was backed by top officials including U.S. Sen. Jack Reed and U.S. Rep. Seth Magaziner. Incumbents prevailed in all but one contested state legislative primary.

Picheco lost by a similar margin when she first challenged Lima, a 32-year incumbent, in the 2022 Democratic primary

If elected, Picheco, 35, would have been the first transgender official to win state office in Rhode Island. She sat down with Rhode Island Current for a recent interview to talk about her experience.

Twenty-four states, along with D.C., have elected trans officials to some level of state or local office as of June 2023, though trans and nonbinary officials represent less than .0002% of officeholders nationwide, according to 2023 data from the LGBTQ+ Victory Institute.

Backlash and threats against trans candidates and officeholders are well-documented. U.S. Rep.-elect Sarah McBride’s historic victory in November, becoming the first openly trans member of Congress, led to a fight over bathroom access on Capitol Hill.

In Washington, Republicans are the ones pushing for transgender bathroom restrictions.

But Picheco’s attacks came from a fellow Democrat, part of the same party that espouses inclusivity and advocacy for the LGBTQ+ community. Lima — who has held the District 14 seat since 1992 — is part of a shrinking, but vocal, contingent of pro-gun and pro-life Smith Hill lawmakers who identify as Democrats, despite voting records that seem, at times, at odds with the party platform.

During the pandemic, Lima opposed school masking requirements. She voted against expanded voting access laws, including enshrining early, in-person voting, in 2022, and opposed decarbonization mandates under the 2021 Act on Climate Law.

Lima was also among the most vocal proponents for reinstating annual cost-of-living increases to state pensioners, which were partially reinstated as part of the fiscal 2025 budget. The compounded increases were suspended as part of a series of pension reforms enacted in 2011 under then-Treasurer Gina Raimondo. Lima benefits directly from the reinstatement of cost-of-living increases as a former Providence public school teacher. She retired in 2010.

She defended the mailer in a recent interview.

“Everything I said was totally documented,” Lima said. “I think the flyer portrayed the transparent, accurate facts.”

Rep. Charlene Lima, a Cranston Democrat and retired Providence schoolteacher, is shown on the House floor on June 9, 2023, speaking against the 2011 pension reform that ended cost-of-living adjustments for state retirees. (Photo by Nancy Lavin/Rhode Island Current)

Party vs. priorities

The Working Families Party in Rhode Island endorsed and provided volunteer canvassing support for Picheco in both her 2022 and 2024 campaigns. Lima’s positions were at odds with the Democratic party, and more importantly, the district, said Zack Mezera, the state chapter’s organizing director.

“The party often does not match the priorities of the person,” Mezera said. “That’s true in a lot of places, not just Rhode Island. But here, the threshold to winning is lower because there are fewer voters in each district.”

To Mezera, Lima’s attacks on Picheco’s gender only underscored the disconnect between the sitting representative and voters.

“What a missed opportunity to talk about persistent flooding, wage gaps, the struggles of nursing home and child care workers, all the things that people in the district actually live with and care about,” Mezera said of Lima’s mailer. “I think Charlene expects the very least of her constituents.”

Picheco said she entered the race knowing there was the potential her gender would be used against her.

“I wasn’t necessarily concerned for myself or my own safety,” Picheco said. “I was just more so concerned about how, if I was attacked, how that would be perceived by the wider trans community.”

In an emailed statement Friday, Chip Unruh, a spokesperson for Reed, said the senior senator “does not support attacks on anyone’s gender.”

Magaziner and House Speaker K. Joseph Shekarchi, who donated to Lima’s campaign, also affirmed their support for the LGBTQ+ community in separate statements, insisting they did not know about the mailers.

“Speaker Shekarchi supported all the House Democratic incumbents, including Representative Lima,” Larry Berman, a spokesperson, said in an email. “He was not aware of this mailer and he does not get involved in the messaging in Representatives’ campaigns.”

Shekarchi also referenced his support for a new state law shielding medical providers from civil or criminal action for offering access to transgender and reproductive health services.

What was said at a Cranston School Committee meeting

One of the claims made in Lima’s campaign mailers references a July 15 Cranston School Committee meeting where Picheco spoke in public. Lima did not attend, despite alleging Picheco made comments that she wanted to let “biological boys who identify as transgender girls” play girls sports.

“It’s public knowledge,” Lima said when asked how she knew what Picheco said.

During the meeting, Picheco asked the school committee to follow existing state and federal policy and “to provide a safe learning environment for all students, including trans students as well,” according to official minutes from the meeting. Sports were not mentioned at all.

Regarding the mailer statement that Picheco wanted “SEX for pleasure” taught in elementary school, the 2022 bill referenced would have modernized sex education curriculum for students in grades six to 12 to be more inclusive of different races, genders, ethnic and cultural backgrounds and sexual orientations, and to “affirmatively recognize pleasure-based sexual relations.”

Picheco wrote in support of the bill sponsored by Providence Democratic Rep. Rebecca Kislak, although it never advanced out of committee.

“I have absolutely no negative feelings toward members of the LGBT community,” Lima said. “I think all people should be treated with respect and fairly. I don’t think any group should be imposing on young girls. We have to use common sense and reason nowadays.”

Picheco never confronted Lima about the mailers. She didn’t think it was worth her time.

And she wanted her campaign to stay focused on the issues.

“Being trans, that’s not why I am running for office,” she said. “I am committed to advocating for everybody in my district, trans or not.”

Picheco’s endorsements included Climate Action Rhode Island, Planned Parenthood, the Rhode Island chapter of SEIU and VoteVets, a national advocacy group for veterans and military families.

Picheco, who grew up in Connecticut, enlisted in the U.S. Navy at age 23 as a way to pay for college. She spent six years working on a nuclear-powered submarine stationed out of Groton in a role she described as a “very technical job with a lot of computers.” Her military service gave her a chance to pursue her education dreams, and the confidence to be open about her identity. It was also where she met her partner, with whom she now owns a home in Cranston.

After she completed her service in 2019, Picheco slowly began more openly identifying and talking about being trans. She graduated with a bachelor’s degree in sociology and political science from the University of Rhode Island in 2023. She’s now working toward a master’s degree at the University of Massachusetts Boston, where she also teaches undergraduate students.

Picheco now shrugs off the mailer as “kind of uncreative.”

Certainly not a deterrent to potentially running again.

“I’m not ruling it out,” Picheco said. “I’m someone who pretty much constantly looks forward.”

Rhode Island Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Rhode Island Current maintains editorial independence. Contact Editor Janine L. Weisman for questions: info@rhodeislandcurrent.com. Follow Rhode Island Current on Facebook and X.

The Rhode Island GOP has joined with Republican parties in 12 other states defending former President Donald Trump’s constitutional right to appear on the 2024 ballot in Colorado.

The brief filed Nov. 30 in Colorado Supreme Court comes as the state’s highest court prepares to hear oral arguments this week on the disputed outcome of a lower court ruling.

Last month, a Denver District Court judge agreed with Colorado voters who claim that Trump “engaged in insurrection” for his role in the Jan. 6, 2021, attacks on the Capitol, but did not conclude that those actions barred him from running for – or appearing on the ballot for – president.

The 28-page “friend of the court” brief filed by GOP officials in 13 states, including Rhode Island, argues that only the state parties, not the court nor the Secretary of State, have the power to decide presidential nominees. While the case only applies to Trump’s eligibility to appear on Colorado’s presidential primary ballot, barring him “unquestionability lessened” his viability as a candidate and the power of the Republican parties in other states, the brief stated.

Joe Powers, Rhode Island GOP chairman, framed the matter as one of constitutional integrity, rather than support for Trump.

“It has nothing to do with Trump and has everything to do with the court’s intervening on who and who cannot be on the ballot,” Powers said in an interview on Monday. “I don’t care who it is.”

Pressed on whether he would say the same if a Democratic candidate’s ballot eligibility was in question, Powers insisted he would, though he acknowledged, “I wouldn’t be as vocal about it because, c’mon, this is still politics.”

Powers also described the Rhode Island GOP’s involvement as part of its comeback from a series of losses for state and local races, including Republican Gerry Leonard Jr., who lost the Nov. 7 special congressional election to Democrat Gabe Amo.

“The way I look at it, and the way the Republican Party comes back from such losses is to make sure people understand we’re out for them, we’re not out for blood,” Powers said.

Yet the Rhode Island GOP did not get involved when a similar question over Trump’s eligibility came to its own backyard, with a separate case seeking to oust Trump from Rhode Island’s 2024 primary ballot filed in U.S. District Court in October.

A federal judge ultimately dismissed the complaint brought by John Anthony Castro, a Republican write-in candidate from Texas. Powers said he did not consider the Rhode Island legal challenge to be as serious or legitimate as the one in Colorado.

Rhode Island and Maine were the only New England states whose Republican parties joined the brief filed in Colorado Supreme Court. Most of the 13 states signing on to the friend of the court brief are Republican-leaning.

The Colorado Supreme Court is scheduled to hear oral arguments in the case starting Wednesday, Dec. 6.

Rhode Island Current is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Rhode Island Current maintains editorial independence. Contact Editor Janine L. Weisman for questions: info@rhodeislandcurrent.com. Follow Rhode Island Current on Facebook and Twitter.