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Landmark deal put off — again

May 10, 2011

PROVIDENCE — The hoped-for sale of Woonsocket's Landmark Medical Center once again failed to materialize yesterday as a Superior Court judge said the bidders for the teetering hospital have not yet eliminated various deal-breaker provisions from their offers, as he directed them to do nearly two weeks ago.
Judge Michael Silverstein had been expected to make a decision on which, if any, of Landmark's prospective suitors would be allowed to move forward, but instead he gave them all one last chance to resolve their problems, setting a new deadline of May 27 for a possible selection.
“The court is not satisfied at this juncture that its instructions have been fully complied with,” Silverstein said. “The court is going to continue this matter one more time.”
Hopefully, Silverstein said the bidders will do their utmost to heed his orders “on fear the court will not entertain the bid of anyone whose issues have not been resolved.”
Silverstein's comments were made before at least a dozen lawyers and state officials with interests in the sale of Landmark Medical Center, including the three bidders, Prime Healthcare of Ontario, Calif.; Transition Healthcare of Franklin, Tenn., and RegionalCare Hospital Partners of Brentwood, Tenn. Also on hand were Jonathan Savage, the special master in charge of running Landmark, in receivership since June 2008; Attorney General Peter Kilmartin and Theodore Orson of the Department of Health, representing the state regulators; Administration Director Richard Licht; and others.
At the time of the last hearing, Prime had proposed operating Landmark almost exclusively with revenues from Medicaid and Medicare, spurning private insurers like Blue Cross/Blue Shield of Rhode Island. Transition wanted Blue Cross in the revenue picture, but it hadn't yet secured a reimbursement agreement with the company and wanted the option of scuttling the sale if it was unable to negotiate one – even if it had won the bid. The company had also been unable to secure a tax treaty with the city of Woonsocket, another potential deal killer.
Similarly, RegionalCare wanted to walk away if it is unable to come to terms with the United Nurses & Allied Professional Local 5067, the union that represents nurses and other direct care providers at Landmark and its sister facility, the Rehabilitation Hospital of Rhode Island in North Smithfield, also part of the sale.
Though the union has already reached new collective bargaining agreements with Prime and Transition, it's embroiled in a cold war with RegionalCare and adamantly opposes Landmark's acquisition by the company. In its latest public salvo, UNAP threatened to strike if RegionalCare wins the bid, saying the for-profit company wants to run the hospital on the backs of its workers.
Yesterday, Silverstein conceded “it is highly unlikely” RegionalCare can make peace with UNAP, but he instructed the company to try anyway, saying, “The court hopes that goodwill will prevail and there will be a resolution of that issue.”
With respect to Transition, Silverstein no longer mentioned any pending issues with Blue Cross, but he instructed Savage to work with the company to conclude an asset purchase agreement, a core item of each suitor's overall bid package.
The one company that did not get a new homework assignment from Silverstein was Prime – which he didn't mention at all. Silverstein has been critical of Prime's service-delivery model for Landmark, saying it would squeeze out too many patients from the Woonsocket area who rely on private insurance to pay their medical bills.
Asked later whether the company now has as agreement in principle on insurance reimbursements with Blue Cross, Prime lawyer Cynthia Warren answered firmly, “We do.”
For Transition, lawyer Vincent Indeglia seemed confident that Transition would be successful in concluding an asset purchase agreement with Savage. “As a matter of public record,” he said, “there were three or four points in it where consensus was not reached between the special master and the Transition people,” said Indeglia. “It comes down to just a few paragraphs in a document that's about 100 pages long.”
Indeglia said Transition has also concluded a tentative tax treaty with the city of Woonsocket, though the details must still be hammered out with the administration and approved by the City Council.
Savage was abruptly shut down by Silverstein during the last hearing when the special master asked for leeway to reopen the bid process in preparation for the possible collapse of the negotiations with the current crop of bidders. The special master and his legal team declined all comment on the current status of talks yesterday, saying the matter is in the judge's hands.
“I'm not going to have any comment on whether there are any interested parties,” said Bill Fischer, a spokesman for Landmark.
All of the bidders are for-profit companies pledging to pour tens of millions into Landmark during the next few years, but Silverstein has said he would not allow any of the bidders to purchase the hospital as long as there are contingencies in their offers that would allow them to back out of the deal.
To do so would jeopardize the future of a facility that is essential to the public's interest in the preservation of an accessible provider of quality health care services in northern Rhode Island, the judge says.
Adjusted for charitable care, commitments to labor and long-term capital investments, Transition appears to have tendered the most generous offer, roughly $90 million, according to Silverstein. RegionalCare's offer boils down to about $70 million; Prime's $51 million.

Comments

LandFill Hospital

May 11, 2011 by Twinhman (not verified), 2 years 49 weeks ago
Comment: 389

One can only assume the prospective new owners evaluated LandFill Hospital and may be thinking it over - again. How can a for-profit hospital make it when they will be catering to the many welfare receipients and illegals that frequent this place. Close it down!

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