CharterCare and Prospect Medical submit joint venture application
CHARTERCARE HEALTH PARTNERS and California-based Prospect Medical Partners jointly submitted an application Friday to the R.I. Department of Health and Attorney General's office for approval of their proposed joint venture. Under the terms of the agreement, CharterCare will hand over management of its 579 licensed beds and 3,000 employees to Prospect.
PROVIDENCE – CharterCare Health Partners and Prospect Medical Holdings jointly submitted an application Friday for approval of their proposed joint venture to the R.I. Department of Health and to the Rhode Island attorney general per the provisions of the Rhode Island Hospital Conversion Act.
The application follows the signing on Sept. 24 of an asset purchase agreement, under the terms of which Prospect Medical Holdings will serve as the manager of the hospital joint venture under a management contract, and will provide $95 million to CharterCare over the next four years. Of the $95 million total, $45 million will be subject to regulatory approval to be used for debt reduction and short-term working capital.
Prospect Medical Holdings will provide an additional $50 million over the following four-year period to provide capital for physician network development, facility improvement and technology acquisition, the companies said.
“We look forward to working with the Department of Health and the attorney general and staff to provide all needed information and answer any and all questions as part of the application review,” said CharterCare in a release Friday. “We are confident that our proposed joint venture will provide new and valuable options for consumers of health care services in Rhode Island.”
CharterCare, the corporate parent of Roger Williams Medical Center and St. Joseph Health Services of Rhode Island/Our Lady of Fatima Hospital, announced its intention to partner with Los Angeles-based Prospect Medical Holdings on March 21.
Both CharterCare and Prospect Medical Holdings will be equally represented on the organization’s governing board.
The transaction is expected to be completed by the early part of next year, subject to regulatory and church approval (St. Joseph Health Services of Rhode Island/Our Lady of Fatima Hospital have remained Roman Catholic institutions even after merging with Roger Williams).