Woonsocket's Landmark Medical Center clears regulatory hurdles

Woonsocket's Landmark Medical Center clears regulatory hurdles

PROVIDENCE – Both the Rhode Island Department of Health Director Michael Fine and Attorney General Peter Kilmartin have now given regulatory approval for the sale of Landmark Medical Center to California-based Prime Health Services.

DOH delivered their approval, which includes the purchase of Landmark's sister facility, the Rehabilitation Hospital of Rhode Island by Prime Healthcare Services, on Friday, Oct. 25. The approval included a list of contingencies, including the requirement that Prime invest $30,000,000 in the facility over the next five years. Fine also notified the applicants that he had approved a separate regulatory process known as change of effective control, which had previously received the overwhelming support of the RI Health Services Council.

On Monday, Oct. 28, Kilmartin followed suit, approving the sale with his own set of conditions, after review of the application as required by the state's Hospital Conversion Act. In his approval, the attorney general referenced the for-profit hospital chain's record in California, where it has been accused of overbilling the federal Medicare program, emphasizing disclosure.

The conditions include "that Prime transfer certain charitable assets to the Rhode Island Foundation for disbursement, provide information about any actions taken against Prime or any final resolution to the investigation currently being conducted by the Department of Justice and Office of Inspector General regarding coding at Prime’s hospitals, and that the health chain inform the Attorney General of any actions taken against it or any of its hospitals or affiliates by any governmental entities."

If the sale is completed, Prime will become the state's first for-profit hospital.

“Cleary, a five year special mastership for any business is not an ideal situation and is not the model which others should endeavor to match,” said Kilmartin. “The regulatory review for the purchase of Landmark has been approved for the second time, and Prime has satisfied the requirements enumerated by the HCA.”

Special Master Jonathan Savage, the hospital's receiver since the fiscally struggling facility first required intervention in 2008, must now take the reigns and file a petition for closing the sale in court. The petition will establish a closing deadline, and the parties are reportedly requesting that the court approve a closing date of no later than Dec. 31, but they are targeting Nov. 30 as their preferred closing date.

Steward Health Systems, the last buyer to pursue purchase of the hospital in 2011, backed out of the deal after receiving full regulatory approval, saying they were unable to reach agreements with other local parties, including Blue Cross Blue Shield of Rhode Island.

“It has been a long and winding road these past five years, and we are now starting to see some light at the end of the tunnel," said Landmark President Rick Charest. "This approval is the collective effort of our employees, physicians and so many members of the community who pulled together to save Landmark Medical Center,”

Prime Healthcare operates 19 hospitals in four states and was recognized as the Top 15 Health System in the nation three times in the past five years by Thomson Reuters and Truven for quality patient care.