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Coalition questions Caritas sale

September 16, 2010

More news in the saga over the hospital chain that needs to be sold before it can buy financially strapped Landmark Medical Center in Woonsocket.

The Boston Globe reports today that a group of Massachusetts community hospitals is urging the Attorney General’s office to put more restrictions on the potential sale of the Caritas Christi hospital chain to Cerberus, a private equity firm.

The hospitals, which call themselves the Healthcare Access Coalition, says the sale might create unfair competition with independent hospitals that don’t have the same financial muscle behind them.

The Globe lists these requests-

■Prohibit the holding company, Steward, from raising the prices it charges patients and insurance payers for hospital services for three years other than to account for inflation.

■ Bar Steward from entering exclusive health plan contracts that bar competing hospitals. An example would be a limited network contract with an insurer that required patients to see only Caritas-affiliated doctors.

■ Restrict the new owner from striking joint ventures with health insurance carriers. Such deals could put Steward in the health insurance business, the coalition said, giving it an inside track on contracts that boost reimbursement payments to Caritas hospitals.

■ Require Steward to disclose all of its commercial and government insurance contracts to the attorney general’s office.

■ Forbid it from “improperly inducing physicians away from the coalition hospitals’’ and require Caritas to file quarterly reports listing doctors with admitting privileges. The letter didn’t define improper inducements, but Stern said it would involve Cerberus courting doctors with “overly generous’’ incentives.

■ Extend Steward’s commitment to hold Caritas from three to seven years, but only in concert with the other conditions.

■ Appoint a monitor to oversee Caritas hospitals under Steward and require notice of any future sale.

It’s a long road before a sale with Cerberus is final.  Caritas not only needs approval from the Attorney General’s office , the Department of Public and the Mass Supreme Court; even the Vatican has to weigh in.

The sale of Landmark Medical Center to Caritas is dependent on court approval and a lengthy hospital merger application process through the RI Department of Health and the Attorney General’s office.

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