On the same day that Steward Healthcare said in court filings that it planned to close Norwood Hospital, the real estate company that owns the hospital site and its buildings filed its own lawsuit against the state Department of Public Health, alleging the department is standing in the way of moving forward with the hospital’s reconstruction.
Norwood Hospital was forced to close after extensive damage from storm flooding in June of 2020 and Steward Health Care, which operated the hospital, was working on rebuilding the facility. The company stopped construction this past January as it faced a financial crisis that ultimately led it to declare bankruptcy, sell five Massachusetts hospitals and close two others.
The real estate company that owns the hospital site, Medical Properties Trust, said in its lawsuit that it sought to continue the construction process after Steward stopped paying for it.
The lawsuit says progress of the project had been slowed by a dispute with insurance companies over claims related to the flooding.
“MPT is reliant on these insurance payments to help cover the costs of construction and advance the project, and the wait to receive them is contributing to the ongoing construction delays,” the lawsuit says.
Now, though, MPT is blaming the state for bringing things to a halt.
In September, the state DPH rejected a request to extend the period of a required construction approval. In its letter denying the extension, a DPH official said the decision was the result of a failure by Steward Healthcare to meet a requirement to replace 61 inpatient psychiatry beds at another hospital facility or campus.
The letter says Steward was given a deadline of December 31, 2022 to make those beds “licensed and operational,” and that the deadline was then extended to July 1, 2024.
“In the Extension Request, [Steward] acknowledges that it has not complied with this condition and does not address or acknowledge its responsibility to license and operationalize these beds,” Dennis Renaud of the DPH wrote in the letter.
Therefore, he wrote, the extension was denied.
As MPT now seeks to sell or lease the property, the lawsuit says expiration of the approval “will make the premises less desirable to the new hospital operator” who would have to start that application process all over.
“Such a delay is not only to the significant financial detriment of MPT, but to the significant public detriment of the 253,000 Norfolk County residents who have already gone without the emergency and primary care services of Norwood Hospital for over four years,” the complaint reads.
A spokesperson for Governor Maura Healey responded to a request for comment with a brief statement that did not directly address the new legal complaint.
“For too long, MPT has put their greed before the health and wellbeing of the people of Massachusetts,” the statement reads. “We’re focused on moving forward now that they and Steward are out of Massachusetts for good.”
The dispute over Norwood Hospital comes as some local officials have expressed optimism about the future of the hospital.
“The commonwealth cannot survive without an additional hospital,” Norwood’s town general manager, Tony Mazzucco, said on Tuesday, noting that the hospital serves a quarter of a million people. “It was a profitable hospital before the flood closed it. So the hospital will be coming back, it’s just a matter of time.”
