savage

The lawyer overseeing financially troubled Landmark Medical Center is contesting the amount of an annual licensing fee the Woonsocket hospital must pay the state.

Jonathan N. Savage contends in court documents that the hospital does not have to pay the full $3.5-million fee because Landmark fell into receivership before the payment was due on July 14.

Landmark petitioned the court in late June to clear the way for a potential merger with another hospital. The Woonsocket facility has been losing money for many years and at the end of the last fiscal year was $7.2 million in debt. In the petition, Gary Gaube, then chief executive officer and trustee of Landmark, cited the facility’s provision of more than $8.5 million annually in uncompensated care to the uninsured and the underinsured as a key reason for its troubles.

On June 26, Superior Court Michael A. Silverstein appointed Savage, of Shechtman Halperin & Savage, temporary special master of Landmark. A month later, the judge made permanent Savage’s appointment.

He is functioning as the hospital’s president, chief executive officer and chairman of the board, deciding on all expenditures, hiring and other issues.

One of the first decisions Savage made was to dispute the licensing fee, which he contends should be halved because of the timing of the receivership filing. In response, the state threatened to deduct any unpaid portion of the fee from the more than $6 million the state owes Landmark for uncompensated care to patients at the Woonsocket hospital.

As the result of a court order signed by Silverstein last week, the state agreed to pay Landmark about $2.5 million and deposit another $3.5 million into an escrow account until the dispute is resolved, according to Laurie Petrone, director of communications for the state Executive Office of Health and Human Services.

With that dispute set aside for the time being, Savage continues working with a global accounting firm to realign Landmark’s finances and operations.

Silverstein last month approved the hiring of a four-person team from the health-care practices division of PricewaterhouseCoopers LLP to assist Savage and to help find a merger partner for the financially ailing hospital.

pgrimald@projo.com