Health Department approves Landmark sale, with conditions

LANDMARK MEDICAL Center took a big step toward becoming a for-profit hospital that will be owned by Steward Health Care, renamed the Blackstone Medical Center and incorporated in Delaware.
Posted 5/23/12

PROVIDENCE – Landmark Medical Center took a big step toward becoming a for-profit hospital that will be owned by Steward Health Care, renamed the Blackstone Medical Center and incorporated in Delaware.

Dr. Michael Fine, the director of the R.I. Department of Health, issued approval Monday evening for the Hospital Conversions Act application by Steward to purchase Landmark and its sister facility, the Rehabilitation Hospital of Rhode Island.

Fine also approved the Change in Effective Control application, which had been approved earlier this month by the state Health Services Council.

“In evaluating these applications, [our agency] was charged with considering the totality of the evidence, as well as the needs of the people of Woonsocket,” Fine said in the news release accompanying documents about the approval.

The agency staff worked hard to thoroughly review these applications quickly and efficiently to keep this process moving along, Fine continued. “After extensive review of the evidence, the R.I. Department of Health determined that Steward adequately met the criteria for approval of its applications.”

The approvals by Fine complete the reviews by the R.I. Department of Health, according to spokeswoman Dara Chadwick.

The Rhode Island Attorney General’s office still needs to complete its regulatory review and give its regulatory approval, focused on aspects of charitable assets.

Landmark has been in receivership for almost four years, since June 2008. The final purchase agreement will need to be approved by Superior Court Judge Michael A. Silverstein.

In approving the applications, Fine imposed 16 conditions. They include:

    • Steward and Blackstone Medical Center shall collaborate and coordinate care with primary care and maternity care providers in its service area, including physicians and community health centers;

    • Steward and Blackstone Medical Center shall participate in currentcare, Rhode Island’s health information exchange, and endeavor to enroll all of its patients in currentcare;

    • Steward and Blackstone shall not use ownership interests as incentives for hospital employees or physicians to refer patients to the hospital;

    • Data, including but not limited to finances, utilization, and demographic patient information, shall be furnished to the R.I. Department of Health upon request;

    • Steward shall expand $4.5 million in physician recruitment in its first five years after closing on the purchase of the hospital;

    • Steward shall honor naming commitments to past donors; and

    • Composition of both facilities’ board of directors be made up of between seven and 11 members, including three who serve by virtue of their positions at Steward, 2 to 3 physicians or hospital medical staff, and community leaders or prominent local business executives with an interest in revitalizing the hospital.

Legislation to amend the current Hospital Conversions Act is now before the General Assembly.

One version, 2012-S 2180Aaa, which passed the Senate, is now pending before the House Committee on Corporations. A second version, 2012-H 7283, is scheduled to be voted on when the committee meets on Thursday.

The key provision in the proposed legislation would enable Steward to purchase additional financially troubled nonprofit community hospitals in the Rhode Island without having to wait for three years following completion of the Landmark purchase.

Steward, owned by a private equity firm in New York City, Cerberus Capital Management, currently owns 10 hospitals in Massachusetts.

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