AG Approves–With Conditions–Prime Takeover of 6 CA Hospitals

Earlier today, California Attorney General Kamala Harris approved the sale of 6 Daughters of Charity hospitals to Prime Healthcare, with significant conditions, including keeping key services open for 10 years, ensuring charity care levels at historical levels, reforming Prime’s problematic debt collection practices, and ensuring access for LGBT Californians and women reproductive health services.

Health Access California and other consumer, community, and health care groups had submitted written and oral testimony in opposition to the sale–in part because Prime’s original commitments to the community were short-term, limited, and conditional. So we support the AG’s decision to impose strong conditions on the sale of the Daughters of Charity Health System, to ensure that patients and communities served by these hospitals will continue to have access to critical services. Given Prime Healthcare’s perturbing past practices, we call on the Attorney General to closely monitor this transition and Prime’s action after the sale. She should use her enforcement authority to ensure that Prime Healthcare honors its commitments to the community and abides by the conditions of the sale.

The conditions require that Prime Healthcare:

* maintain current services at the hospitals (beyond what is minimally required of acute care hospitals, which is emergency care and some basic services) for ten years (instead of five). This goes beyond the terms of the Definitive Agreement, which was limited and conditional (subject to physician availability, changing community needs and financial viability). 

* contract with Medi-Cal and Medicare for ten years instead of just five. The Definitive agreement only included Medi-Cal FFS and Medicare. The AG’s condition includes Medi-Cal managed care. (Health Access had also asked that Prime be required to contract with Covered California plans, but such a requirement is not included.)

* maintain community benefits at current levels, and after year 2 the amount spent on community benefits is tagged to the Consumer Price Index.

* commit the necessary investments required to meet and maintain OSHPD seismic compliance requirements through 2030.

It is telling that another of the requirements is that Prime must revise all its debt collection practices and procedures in order to comply with state and federal law. The Attorney General must keep a close and ongoing eye on Prime, given its past practices, on all these important issues.