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2 vendors finally paid after Sebastian River hospital defaults

STORY BY JON PINE (Week of April 18, 2024)

Sebastian River Medical Center recently lost two civil lawsuits by default, the court awarding more than $92,000 to a prepared food vendor and landscaping company to cover unpaid invoices dating back to June 2022.

In January, Vero Beach 32963 reported that the 145-bed hospital was six months in arrears on its county water and sewer utility bills, but the county was not the only supplier waiting to get paid.

According to Indian River County Circuit Court documents, Steward Sebastian River Medical Center, Inc., failed to pay 47 invoices totaling $42,730 for food from Fresh Provisions, Inc., a Sarasota company that provides pre-packaged meals and snacks to hospitals and other institutional customers in Florida and Georgia. A complaint filed with the court on Feb. 15 detailed unpaid invoices dating from Sept. 1 to Oct. 21 of last year.

“Defendant has failed to object to the invoices or otherwise meaningfully respond other than making excuses for lack of payment,” the complaint says. Fresh Provisions sent a letter demanding payment on January 26, 2024. The hospital did not respond to the letter, or numerous telephone and email attempts to obtain payment, according to the suit.

The hospital and its attorney failed to respond to the complaint and did not file any motions in the case, so a Clerk’s Default was entered on March 13.

Robert Chapman, a Tampa attorney representing Fresh Provisions, confirmed that Steward has finally paid the outstanding invoices, saying a check recently showed up.

In an earlier lawsuit, A&L Lawn Service of Sebastian petitioned to court to recoup $49,625 for landscaping work performed at the hospital from June through December of 2022. A&L Lawn Service sent the hospital a letter on Jan. 6 demanding payment. When the hospital failed to respond, Vero Beach attorney Jonathan Barkett filed suit on behalf of the lawn service in September 2023.

Like in the Fresh Provisions case, court records show that the hospital never answered the complaint or filed any motions in the case. Judge Robyn E. Stone issued a Final Judgement of Default on December 19, ordering the hospital to pay $50,219, including court costs of $594.

Space Coast Director of Marketing for Steward Health Care Cathy Pague declined to comment on either case except to confirm that payment had finally been made to both vendors.

The cases represent the latest local evidence of ongoing financial turmoil in the Steward Health Care national hospital chain. Steward purchased the Sebastian hospital in 2017 and operates nine other hospitals in Florida, including Melbourne Regional Medical Center and Rockledge Regional Medical Center in Brevard County. The company also operates hospitals throughout Massachusetts, Pennsylvania, Ohio, Arkansas, Louisiana, Texas and Arizona.

In 2022, Steward’s various corporations restructured hundreds of millions of dollars in debt, much of that owed in back rent to an affiliated holding company which owns the land and hospital buildings. The hospitals are grouped into LLCs by state or region, contracting with corporate for management, legal and accounting services.

The Boston Globe has reported on Steward’s Massachusetts hospital system, saying the company “is in such grave financial distress that it may be unable to continue operating some facilities.” At the end of 2023, Steward owed approximately $100 million in back rent, and deferred rent to Medical Properties Trust (MPT), the largest U.S. hospital landlord, MPT said in a January news release.

Steward Health Care also was the subject in at least 14 Massachusetts lawsuits filed by venders over unpaid invoices, the Globe reported. In a statement to the Globe, Steward blamed its financial challenges in part on the low Medicare reimbursement rates.