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Judge lifts freeze on Landmark lawsuit

July 24, 2012

PROVIDENCE – A Superior Court judge yesterday granted Landmark Medical Center’s motion to lift a freeze on its lawsuit accusing Blue Cross/Blue Shield of Rhode Island of starving it to death with illegally stingy reimbursements — but he stopped short of letting the suit go forward.
After a contentious, three-hour hearing, Judge Michael Silverstein ordered Landmark and Blue Cross for written briefs and said he would decide whether the suit has any merit on Aug. 30.
But if you’re wondering how the dispute affects the impending sale of the Woonsocket hospital to Steward Health Care of Boston, here’s your answer: stay tuned.
The increasingly fuzzy picture could clear up as soon as Friday, when Landmark is due back in court to update Judge Silverstein on the status of all the unresolved contingencies in the asset purchase agreement that could allow Steward to walk away from the deal, no questions asked. Neither of those dealbreaker provisions involve the settlement of Landmark’s contract dispute with Blue Cross, but Steward has said it would be more likely to waive those contingencies if an acceptable contract with Blue Cross were in place before the closing.
Friday is also the day Attorney General Peter Kilmartin established as the deadline for Steward to close on the Landmark deal as part of regulatory approval of the sale under the Hospital Conversions Act. After yesterday’s hearing, lawyers for Steward and Landmark both confirmed that they will not meet that date and no new deadline has been established.
Officials for Landmark say another key element of the sale, the asset purchase agreement with Steward, expired on July 20 and has not yet been renewed, as it has been many times in the past. Although that gives Steward free rein to terminate the deal at any moment, without notice, “We are optimistic that the Steward deal will move forward,” Bill Fischer, a spokesman for Landmark said after the hearing.

Read more in our print edition.

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