An owner of West Suburban and Weiss hospitals is asking a judge to enforce a settlement agreement that would see the hospitals sold to Insight Health Systems for $1 and include a paid consultancy for the hospitals’ current CEO.
The motion filed Friday asks the judge to either enforce the terms of a settlement that it says the hospitals’ owners had agreed to in principle in May but never finalized, or appoint a receiver to take control of the hospitals. The motion publicly reveals, for the first time, details of the potential settlement agreement.
The motion was filed Friday in Cook County Circuit Court by Ramco Healthcare Holdings, which owns the hospitals’ property. It was filed after an attorney for Resilience Healthcare, which operates the hospitals, said in court Friday that Resilience was not willing to move forward with the proposed settlement.
Resilience is 60% owned by Dr. Manoj Prasad, who is CEO of the company, and 40% owned by Reddy Rathnaker Patlola, who also owns Ramco. The motion was filed as part of lawsuits the business partners filed against one another shortly after West Suburban closed in March.
According to the proposed settlement terms, Prasad would remain CEO of the hospitals until a binding agreement with Insight was reached, at which point, he would step down.
Insight runs Insight Hospital and Medical Center in the Bronzeville neighborhood, formerly called Mercy Hospital. Insight also bought Mercy for $1 in 2021, when Mercy was on the brink of closure. Attempts to reach Insight for comment were not immediately successful Monday afternoon.
Under the proposed settlement terms, after Prasad stepped down as CEO, he would continue as a consultant for up to six months, earning $100,000.
Prasad would also retain the title to a 2022 Range Rover Sport which, according to a draft of the proposed settlement agreement, is currently titled in his name and in the name of Westlaw Management Group, which Prasad has said is a subsidiary of Resilience.
Attempts to reach Prasad for comment were not immediately successful Monday.
The draft of the proposed settlement agreement does not include any admission of wrongdoing by either side.
The draft of the proposed agreement also includes a provision saying Ramco and Resilience would release a joint statement, once the settlement is finalized, that includes quotes from the Cook County Circuit Court Judge Patrick Stanton from an earlier proceeding in the case, asserting that Ramco failed to prove that Prasad had “misappropriated vast sums of money” and that there was no evidence offered that Prasad caused or failed to address the problems that led to the hospitals’ failure.
Patlola said in a statement Monday, of the proposed settlement, “We are hopeful the Court will enforce the agreement so the focus can return to reopening these hospitals and serving the community.”
Dr. Vishnu Chundi, a former West Suburban physician, said Monday after the proposed settlement details were publicly revealed, that though he’d like to see West Suburban reopen, he was hoping for more transparency in the process. He’d like to know, for example, if Insight would reopen the hospital with all the services it once offered, or as a scaled-back version of the hospital.
“Before, it had legitimate operating rooms. It had full-fledged cardiac service. … What do they mean by reopening? Opening the emergency room? Reopening skeletal services and calling it a day?” asked Chundi, who is also chair of the Chicago Medical Society’s Task Force to Restore Care at West Suburban Medical Center.
Chundi also wants to see accountability for the leaders of West Suburban. West Suburban and Weiss closed owing the state more than $104 million in advance payments as well as unpaid hospital assessment taxes and penalties.
West Suburban, in Oak Park, closed in March, with Prasad saying it was running short on funds because of issues with its billing system. Weiss, in Uptown, closed about a year ago after the federal government said it would cut off the hospital from Medicare funding following a slate of problems. Since then, doctors, nurses, hospital workers and community advocates have pushed for the state to step in to help reopen the hospitals, which serve large numbers of people on Medicaid.
The next court hearing on the matter is scheduled for Aug. 25.
