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Sale of 6 California hospitals to Prime approved — with strict conditions

California Attorney General Kamala D. Harris has conditionally approved a transaction allowing Ontario, Calif.-based Prime Healthcare Services to acquire six hospitals from Los Altos, Calif.-based Daughters of Charity Health System.

In October 2014, Daughters of Charity agreed to sell its hospitals to Prime, and the deal has been a controversial one, with SEIU-United Healthcare Workers West strongly opposing the transaction.

In December 2014, 18 members of Congress from California sent a letter to Ms. Harris urging her to block the deal. "It is our belief that under Prime, patient care and healthcare worker rights will suffer at these hospitals," the congressmen wrote.

The sale of the Daughters of Charity facilities is the largest transaction ever reviewed by the California Attorney General's Office.

Ms. Harris approved the sale with several stern conditions, including requiring Prime to continue operating the facilities for their current purposes for 10 years. Prime must also participate in the Medi-Cal and Medicare programs and have or maintain Medi-Cal managed care contracts at each of the six facilities it's purchasing.

After Ms. Harris approved the transaction, Prime released a statement that said "The conditions imposed on this sale by the attorney general are extensive and many are unprecedented, including maintaining four hospitals as acute-care hospitals and a fifth as a skilled nursing facility for a minimum of 10 years. Prime Healthcare, with DCHS, will need to evaluate the viability and future stability of the DCHS hospitals under these conditions."

SEIU-UHW released a statement indicating it had little faith that Prime would satisfy the conditions. "If Prime lives up to both the letter and spirit of the conditions placed on this sale, community healthcare and services for low-income families will be protected, but given our history with Prime, that's a big if," said Dave Regan, president of SEIU-UHW, in the statement.

A full list of the conditions imposed on the sale can be found here.

More articles on healthcare industry transactions:

Partners HealthCare CEO: Merger deal with Hallmark Health on 'pause'
UPMC, Jameson Health approve definitive merger agreement
3 steps nonprofit health systems should take before merging

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