Letters between Kilmartin, Steward CEO leaked to media

LETTERS regarding the sale of Landmark Medical Center to Steward Health Care were leaked to the media on Monday.
Posted 8/21/12

PROVIDENCE – The pending sale of Landmark Medical Center in Woonsocket to Steward Health Care of Boston took another strange twist on Monday with the leak of private correspondence between Dr. Ralph de la Torres, chairman and CEO of Steward, and R.I. Attorney General Peter F. Kilmartin.

The letters revealed details of private negotiations between Steward and Blue Cross & Blue Shield of Rhode Island that Kilmartin’s office was attempting to facilitate regarding the ongoing contract dispute between the hospital system and the health insurer. Kilmartin’s office was trying to solve the contract dispute outside of the receivership under the jurisdiction of Superior Court Judge Michael A. Silverstein.

The contract dispute is not a condition under the pending asset purchase agreement, according to the parties involved.

At Kilmartin’s request, Steward and Blue Cross met in negotiation sessions in Providence on July 30 and again on Aug. 6, according to the letters, which were leaked to WPRI and published on the station’s website Monday evening.

In a letter dated Aug. 3, Kilmartin wrote to de la Torres and Blue Cross president and CEO Peter Andruszkiewicz saying: “After a week of fits, starts and posturing, it is the observation of this office that both parties have arrived at a position whereupon a true negotiation is underway, albeit belatedly.”

Kilmartin went on in this letter to claim: “It would be irresponsible of me not to state not only what I know and expect, but also what I believe each of you know and, rightfully, cannot state. Failure to create a contract is not an option for either of you or your respective organizations.”

Further, Kilmartin said that both companies “stood to lose professionally in both the short and long term.” Kilmartin warned of potential negative consequences, but added that this should not be interpreted as a “threat” from his office.

However, the Aug. 6 negotiations proved to be disastrous, with Steward’s team walking out on orders from de la Torres.

In an Aug. 7 letter from Kilmartin to de la Torres, Kilmartin detailed a description, from his staff’s opinion, of what occurred in relationship to Steward’s decision to walk out of the negotiations meeting. Kilmartin went on to remind de la Torres of the Aug. 31 deadline to conclude the sale of Landmark, saying that “time is of the essence.”

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