Judge approves Landmark sale, closing set for Dec. 31
THE SALE OF LANDMARK Medical Center to California's Prime Healthcare Services received approval from R.I. Superior Court Judge Michael A. Silverstein at a hearing Tuesday morning. Following the approval - which ended more than five years of court-supervised special mastership of Landmark - the Woonsocket hospital has set a closing date of Dec. 31 to finalize the transaction.
WOONSOCKET – At a Tuesday morning hearing, Rhode Island Superior Court Judge Michael A. Silverstein approved the sale of Landmark Medical Center to Prime Healthcare Services of Ontario, Calif.
The sale has already received regulatory approval from both the R.I. Department of Health and the Attorney General’s office, and following Judge Silverstein’s approval, Landmark has set a closing date of Dec. 31 to finalize the transaction.
“It is not possible to thank everyone who has brought us to this moment. During the last five and a half years we have certainly seen our share of highs and lows,” said Rick Charest, president of Landmark Medical Center and the Rehabilitation Hospital of Rhode Island, in a prepared statement. “This could not have happened without the support, patience and dedication of our hardworking employees and medical staff, and the support of the community.”
The Superior Court’s approval Tuesday – which included an agreement stipulating that Landmark remain a part of Blue Cross & Blue Shield of Rhode Island’s subscriber network for two years – ended more than five years of court-supervised receivership under Special Master Jonathan N. Savage. Landmark petitioned the special mastership in June 2008 to help preserve Landmark’s assets and keep the struggling community hospital financially afloat while it sought an acquisition partner.
Landmark initially pursued an acquisition by Steward Health Care of Boston, a deal that fell through late last year when Steward withdrew from the asset purchase agreement, citing failure to accomplish goals it had set for the deal that would have supported the for-profit hospital system’s model for health care delivery.
Prime Healthcare had previously been one of four for-profit hospital systems that had made bids in 2011 to purchase Landmark, offering $58.5 million in purchase price and investment over five years. Prime, however, had withdrawn from the bidding in May 2011, claiming that it was unable “negotiate a fair and reasonable contract” with Blue Cross & Blue Shield of Rhode Island.
Blue Cross had adamantly denied Prime Healthcare’s claim, saying that it had been “absolutely blind-sided” by the withdrawal. The health insurer pointed to a May 6, 2011, letter from Prime Healthcare saying the hospital network had “unequivocally accepted” Blue Cross’ proposal to enter into a two-year contract agreement.
In September 2012, following Steward’s withdrawal, Landmark signed an asset purchase agreement with Prime Healthcare. Tuesday’s court approval officially concluded the yearlong regulatory process, settling Blue Cross’ disagreement with Prime as well as Blue Cross’ claims of outstanding money owed to Blue Cross.
“I don’t think anybody would have predicted this five and a half year journey, but the bottom line is that it worked,” said Bill Fischer, a spokesman for Landmark. “It’s significant news for Rhode Island’s economy, with the preservation of 1,100 jobs and an outside organization coming into Rhode Island that’s making millions of dollars of expenditures.”
Prime Healthcare’s total acquisition package includes money for capital improvements as well as to pay off Landmark’s debts at the closing, Fischer said.
“This is a significant investment, and Landmark is really an economic driver for the northern Rhode Island community and important to the city of Woonsocket,” said Fischer. “Without this partnership, there was a real scenario where Landmark would have closed its doors.”
Landmark Medical Center treats about 45,000 patients in its emergency room each year, Fisher said.
“Prime Healthcare Services’ investment in this community is unprecedented, and without their support it is hard to envision how we would have remained operational,” said Charest. “Their commitment to capital improvements, physician recruitment and quality outcomes will truly benefit the greater Woonsocket community and the northern Rhode Island health care consumer.”