Attorney General Approves Daughters of Charity Hospital Deal, with Key Conditions

Yesterday afternoon, California Attorney General Kamala Harris approved the restructuring and support agreement between six Daughters of Charity Health System hospitals and BlueMountain Capital Management. The Attorney General’s approval includes significant conditions that keep key services open for 10 years, ensuring charity care levels at historical levels, and $180 million in capital improvements.

Health Access asked the Attorney General to include these conditions, which will help ensure that patients and communities served by these hospitals will continue to have access to critical services, for at least a decade if not more. The AG’s conditions are similar to the ones that she imposed on the previous proposal to sell to Prime Healthcare.

Health Access California and other consumer, community, and health care groups had submitted written and oral testimony in the multiple hearings around the state seeking conditions on this transaction. In addition to placing requirements on keeping key services open, the conditions also require that BlueMountain impose no restrictions on reproductive health care services, invest $180 million in capital improvements at these hospitals, and provide charity care and community benefits.

We are glad that the Attorney General imposed standards for maintaining charity care and community benefits, and that she rejected the arguments of hospital executives against such requirements. Yet we are disappointed that the approval allows for reduction in charity care in future years, given that these hospitals will continue to be important for the significant number of people who remain uninsured or underinsured.

Overall, the AG’s conditions will maintain continuity of care for patients served by these hospitals, and we hope the AG will continue oversight over this deal. According to press accounts, BlueMountain is reviewing the terms of the approval. We hope BlueMountain accepts the conditions as a sign of good faith that they will be responsible and committed partners with these communities in operating these hospitals.

See the AG’s press release here: https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-grants-conditional-approval-daughters-charity

The Attorney General’s decision conditionally approving the transaction with the full list of conditions can be found here: https://oag.ca.gov/sites/all/files/agweb/pdfs/charities/pdf/chs.pdf

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