A bank error that delayed paychecks for employees at Steward Health Care-owned hospitals after the company declared bankruptcy has been resolved, state officials said on Thursday.
“There was a glitch when it came to the banking,” said Gov. Maura Healey at an event Thursday. “That matter has been resolved by the bank. Employees, workers at Steward are getting paid, will continue to get paid. And our focus as an administration remains on protecting patients, protecting these workers, and protecting the stability of the health care market here in Massachusetts.”
Steward Health Care, which owns eight operational hospitals in Massachusetts, declared bankruptcy on Monday after millions in debt and years of financial mismanagement came to light over the last several months. The hospitals are now being sold through bankruptcy court.
On Wednesday, Steward President Mark Rich sent employees an email saying paychecks would not be deposited due to a “processing error.”
“We followed all of Bank of America’s procedures following the chapter 11 filing, and we were assured by them that this would not happen,” Rich said. “We know this is not an easy time for any of you, and we apologize for this inconvenience.”
Secretary of Health and Human Services Kate Walsh said the issue had been resolved Thursday and urged employees not to worry.
“Please come to work,” Walsh said. “Thank you for coming to work. We appreciate everything you’re doing, and if anything changes, we will let you know.”
Advisors let the administration know sometimes banks decide “they’re not going to honor a check for no reason” during bankruptcy proceedings, Walsh said, but the issue was quickly resolved. She noted employees’ pay and benefits are protected under bankruptcy laws.
State officials are working to find buyers for all the Steward facilities, Walsh said, and will “hopefully be able to have this transaction go through in a timely way that protects patients and the workforce.”
Healey urged patients and employees to maintain a normal routine.
“People should continue to keep their appointments, keep their surgeries, and seek care as needed, including at all of the Steward facilities,” Healey said. “And again, a big thank you to the Steward workforce and men and women who are out there providing care as we speak.”
