PROVIDENCE — The R.I. Department of Health has fined Prime Healthcare Services $1 million for transferring Landmark Medical Center and Rehabilitation Hospital of Rhode Island to the company’s nonprofit Prime Foundation in 2016 without state approval.
Joseph Wendelken, public information officer at RIDOH, said Prime Healthcare had still been applying to make the transfer, begun Dec. 31, 2016, when the department discovered the company had not waited for the application.
Harnessing Financial Data for Strategic Decisions in Healthcare
Financial data has immense value. It can tell you the true history of your healthcare…
Learn More
On Jan. 3, 2017, Prime Healthcare reported to the DOH that the transaction had not yet taken place, according to a consent agreement between the DOH and Prime Healthcare released to media Oct. 30.
On June 13, 2017, following an expert review of Prime Healthcare’s business, DOH officials began to suspect the transaction had already taken place.
In response to repeated inquiries about whether the hospitals were already transferred, Prime Healthcare submitted letters to the DOH on July 13, July 14 and July 25 in 2017 assuring officials that the transaction had not taken place. Finally, in July and August the audited financials for Prime Healthcare were released, showing the hospitals had been transferred to Prime Healthcare’s Prime Foundation in December 2016, prior to Prime Healthcare having filed the application for the approval, according to the consent agreement.
“It came to light at the Department of Health that they had already done the transaction without state approval,” Wendelken said.
The application, a Change in Effective Control, is required under the state Hospital Conversion Act.
Wendelken said the application for the transfer is proceeding nonetheless. “We needed to just settle this first,” Wendelken said. He said he could not estimate how long reviewing the transfer is likely to take, or how likely it was to be approved.
Prime Healthcare will pay half of the fine to the R.I. General Treasurer, and the other half will be paid to the City of Woonsocket.
Once the Health Services Council makes a recommendation, that will get passed to Dr. Alexander-Scott. ”We always work to have decisions made in a timely manner, but there is no specified time by which she must make a decision on this kind of application.” Wendelken said.
Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com.
