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Prime Healthcare receives approval to convert Rhode Island hospitals to nonprofit following $1M fine

The Rhode Island Department of Health Health Services Council unanimously approved Ontario, Calif.-based Prime Healthcare Services' proposal to convert Woonsocket, R.I.-based Landmark Medical Center and North Smithfield-based Rehabilitation Hospital of Rhode Island into nonprofit entities Tuesday, according to Rhode Island Public Radio.

A spokesperson for the RIDOH told Rhode Island Public Radio Tuesday no details about the council's vote were immediately available.

The RIDOH Health Services Council's approval comes roughly two weeks after the RIDOH fined Prime Healthcare $1 million for violating a state law requiring state regulatory approval to convert Landmark Medical Center and the Rehabilitation Hospital of Rhode Island into nonprofit hospitals.

The $1 million fine represented one of the largest fines leveled against a healthcare company by the state in at least three decades, according to the report.

The council's approval serves as a recommendation to Nicole Alexander-Scott, MD, director of RIDOH. It is unclear when she will issue a decision on the matter.

A spokesperson for Prime Healthcare told Becker's Hospital Review via email Wednesday, "We thank the council for their due diligence and approval for Prime Healthcare to convert Landmark Medical Center and the Rehabilitation Hospital of Rhode Island to nonprofit status. We look forward to continuing to meet the evolving healthcare needs of the community with a dedicated team of employees, nurses and physicians."

Prime Healthcare reportedly submitted applications to RIDOH Dec. 31, 2016, to legally convert Landmark Medical Center and the Rehabilitation Hospital of Rhode Island into nonprofit hospitals, according to an Oct. 30 consent agreement. Prime Healthcare allegedly continued to reassure regulators it had not completed the transaction involving the two hospitals. However, RIDOH obtained a copy of the health system's financial records for 2016, which showed the transaction had been completed in December 2016.

A spokesperson for Prime Healthcare previously told Becker's Hospital Review Oct. 30 the health system "provided a good faith application acknowledging that the conversion to nonprofit was pending state and regulatory approvals."

Editor's note: This article was updated at 8:45 a.m. Nov. 16 to include a statement from Prime Healthcare.

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