The transaction also includes the Rehabilitation Hospital of Rhode Island. The for-profit Prime, which now operates 25 hospitals, received court approval last year to buy the bankrupt Landmark, which has been in receivership for the past five years. However, state officials suspended the transaction from proceeding this past April, saying Prime’s application to complete the deal was incomplete. Rhode Island regulators expressed concern about allegations that Prime hospitals in California systematically overbilled Medicare.
In September, a subcommittee of the Rhode Island Department of Health advisory council approved Prime’s transaction after Prime CEO Prem Reddy, MD, explained how the company would improve Landmark.
Under the asset purchase agreement, Prime will invest $30 million in technology and capital improvements during the first five years. Prime will also provide at least $4.5 million for physician recruitment, $15 million for routine replacements at Landmark and pay off millions in Landmark debt. The company will also operate Landmark as an acute-care hospital for at least three years.
In October, the Rhode Island Department of Health approved the deal, and a superior court judge granted final approval in November.
More Articles on Hospital Transactions:
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University Hospitals Finalizes Parma, Elyria Deals
Saint Francis Hospital Seeks Other Buyers Outside of Health Quest
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