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Rhode Island Approves Prime's Acquisition of Landmark Medical Center

The Rhode Island Department of Health has approved Ontario, Calif.-based Prime Healthcare Services' purchase of Landmark Medical Center in Woonsocket, R.I.

Michael Fine, MD, director of the Rhode Island Department of Health, issued the approval late last week. He said the state conducted full due diligence on the deal, and officials found Prime met all criteria to acquire the beleaguered Landmark facility.

"We are very pleased to welcome Prime to Rhode Island and thrilled they are joining our collaboration to make Rhode Island the healthiest state in the nation," Dr. Fine said in a news release.

The for-profit Prime, which operates 23 hospitals, received court approval last year to buy the bankrupt, nonprofit 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 over 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 over 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.

More Articles on Hospital Transactions:
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Moody's: 5 Key For-Profit Hospital Consolidation Trends

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