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Ascension agrees to set aside $20M from hospital sale proceeds for indigent care

St. Louis-based Ascension Health has agreed to set aside $20 million in anticipated proceeds from its upcoming sale of St. Joseph Medical Center and St. Mary's Medical Center, both in Kansas City, Mo., to Ontario, Calif.-based Prime Healthcare Services for acute indigent medical care, Missouri Attorney General Chris Koster announced this week.

By law, the attorney general must receive notice when a nonprofit corporation in the state plans to sell all, or substantially all, of its assets, according to a news release.

In a letter sent Feb. 9, Mr. Koster informed Ascension that he could not approve the proposed sale due to his concern that Ascension may intend to take the proceeds of its sale of the Kansas City hospitals out of the region, the release reads. However, Mr. Koster agreed to conditionally approve the sale if Ascension would place the expected net proceeds in a restricted account.

"For more than a century, the people of the Kansas City region have invested in St. Joseph and St. Mary's MedicalCenters, both through their charitable contributions and their tax dollars," Mr. Koster said in a news release. "The Kansas City community has a right to expect that the company managing the assets it has nurtured for decades won't sell those assets for a profit and then take the money out of town."

 

More articles on transactions and valuation issues:

After Tenet deal fails, Connecticut system looks to backup plan

Michigan AG reviewing sale of St. Joseph Mercy

2014: The year of 95 hospital transactions — and more innovative ones at that

 

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