Coakley approves transfers of two hospitals
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Wednesday that her office has approved the proposed transfers of two hospitals while securing significant improvements and conditions for the facilities.
Coakley approved the proposed transfers of Morton Hospital in Tauton, Mass., and Quincy Medical Center in Quincy, Mass., to an affiliate of Steward Health Care System LLC. Coakley's office changed the original terms of the asset purchase agreement by adding safeguards designed to ensure that the transactions are in the public interest.
Coakley determined that the proposed transfer of the non-profit acute care hospitals to a for-profit entity, with the additional negotiated changes, meets the factors identified in state law.
"Today's approvals ensure that the communities of Quincy and Taunton will have local access to full service acute care hospitals with an influx of capital that will improve facilities and preserve jobs," Coakley said.
"In our effort to protect the public interest, we have enhanced these transactions by providing additional stability, oversight and commitments to vital community programs and services."
The approval of the Morton transaction will ensure that key jobs are maintained and ensure the pensions of approximately 1,800 current and former employees.
Revised notes in the agreement of the Morton transaction include maintaining an acute care hospital in Tauton during the 10-year no-close period, maintaining current levels of indigent, charity care and community benefit expenditures during the 10 year no close period and keeping these levels consistent with Coakley's guidelines thereafter, and paying off Morton's outstanding debt and committing $110 to $120 million in capital improvements over 10 years with $85 million to be spent within the first five years, including at least $25.5 million in the first year.
Coakley's approval of the Quincy Medical Center transaction will include $44 million to $54 million in facility upgrades and the maintenance of key jobs.
Revised notes in the agreement of the Quincy Medical Center include the maintenance of an acute care hospital in Quincy that provides at least the same scope of services during a 10-year no-close period, recognizing each bargaining unit provided under existing or expired collective bargaining agreements, paying $35 million to $38 million dollars toward Quincy's outstanding debt through the bankruptcy court, maintaining charity care and community benefit expenditures at least at the current levels for the facility during the 10 year no close period and keeping those levels consistent with Coakley's guidelines thereafter, committing to spend, within five years, no less than $34 million in capital expenditures, including no less than $15 million within the first year and another $10 million in the second year, and spending between $10 million and $20 million for the capital needs of the facility in years six through 10.
Coakley's office has the statutory authority to conduct a review of proposed transfers that involve the transfer of a non-profit hospital's charitable assets to a for-profit entity. The United States Bankruptcy Court must approve the proposed sale of Quincy Medical Center as part of the hospital's long term restructuring plan. Approval by the state's Supreme Judicial Court and the Department of Public Health is required for the Morton Hospital transaction to proceed.