BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced Wednesday that she has restructured the proposed transfer of the Caritas System to Steward Health Care System to include a number of safeguards designed to protect health care consumers.
Coakley also released a report finding that the proposed transfer of the non-profit acute care hospitals to a for-profit entity now meets the factors identified in state law and that her office will assent to a complaint to be filed by Caritas with the Supreme Judicial Court seeking approval of the transaction.
The proposed deal will provide health care for thousands of residents, protect 12,000 jobs at Caritas, create an estimated 3,000 to 4,000 additional jobs and ensure $400 million in capital improvements to the health facilities, Coakley says.
Steward Health Care System LLC is an affiliate of Cerberus Capital Management L.P.
"With the changes our office negotiated with Steward, we found that the transfer of assets will continue the vital services that these hospitals provide while protecting and creating jobs and preserving the pensions of 13,000 current and former Caritas employees," Coakley said.
"After considerable negotiations with our office, we have ensured further protections to prevent Steward from closing or transferring these hospitals and extended the state¹s ability to monitor Steward to five years. This will preserve access to health care for the residents who use these hospitals for important care and services."
Coakley's report notes that the revised agreements require Steward to fully fund the pensions of approximately 13,000 current and former Caritas employees that are currently at risk, satisfy outstanding Caritas debt, and commit to no less than $400 million in capital improvements within four years, which is estimated to create 3,000 to 4,000 jobs.
Steward must also maintain current levels of indigent and charity care as well as community benefit expenditures and pastoral care and related services. The company is also required to preserve the jobs of approximately 12,000 Caritas employees and honor all commitments made by Caritas in the past to donors.
In its review of the Caritas transaction, Coakley's office found that it is not possible for Caritas to continue to survive in its current charitable form and that due care was followed by the Caritas Board and senior management during the transaction.
Approval by the court is required for the transaction to proceed. The Department of Public Health must also approve the transaction for it to proceed.