Owner Of Health Network Sued For Cutting Services, Closing Facilities: PA AG

The company that owns a Delaware County health care network is being sued after its mismanagement resulted in cut services and closures of facilities, the Pennsylvania Attorney General's Office announced on Tuesday, Oct. 29.

Crozer-Chester Medical Center Photo Credit: *Google Maps/Street View*

Merriell Moyer

10/29/2024 5:10 p.m.

Prospect Medical Holdings Inc. is facing a lawsuit for its years of neglect of the Crozer Health System, according PA AG.

The lawsuit claims that Prospect Medical broke a 2016 court-approved Asset Purchase Agreement by cutting services and closing facilities while diverting funds to its private shareholders and investors.

This led to a civil complaint, filed on Tuesday, Oct. 29, that would require Prospect Medical to fund operating costs for Crozer Health System until a new owner is in place.

A preliminary injunction is also being sought to preserve existing services and appoint a receiver to manage the system for the immediate future to avoid additional closures and service cuts.

Mismanagement and diversion of more than $450 million to investors resulted in closures of Delaware County Memorial and Springfield hospitals and the suspensions of related healthcare services, according to the AG. Currently, the remaining Crozer-Chester Medical Center and Taylor Hospital provide services to an average of more than 500 patients each day.

There is no timeline mentioned in the court filings, but the attorney general's office is seeking the injunction and court appointed receiver as soon as possible.

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