“We did our due diligence in reviewing these applications, and found that Prime met the criteria for approval of its applications,” said Michael Fine, M.D, Director of the Rhode Island Department of Health. “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,” he said.
The last regulatory step is a ruling from RI Attorney General Peter Kilmartin's office, said spokesperson Amy Kempe. The statutory deadline for that decision is today.
If Kilmartin approves the deal as well, the next step in the process is the closing of the deal.
Bill Fischer, spokesperson for Landmark Medical Center, said that if Kilmartin approves the deal as well, Landmark's Special Master Jonathan Savage will file a petition for the closing in court. "That motion will help establish a closing date," Fischer said, on or before Dec. 31.
Fischer said there is some work to do between now and the then to make the closing happen, mostly dealing with transferring payroll and procedures over to the new company. Though the closing will not be speedy, "That's a good problem to have," considering the struggle to keep the hospital open. Fisher said the staff and the community deserve a lot of credit for their commitment to the success of Landmark.
The Health Department approved both applications with a set of conditions. Key components of the Prime – Landmark asset purchase agreement include:
• In the first five years, Prime will make investments in technology and capital improvements, and expand services in an amount equal to thirty million dollars ($30,000,000);
• For no less than five years after the closing, Prime will provide no less than four million five hundred thousand dollars ($4,500,000) in funding for the recruitment of physicians;
• Prime will provide funding of no less than fifteen million dollars ($15,000,000) for routine replacements at the hospital;
• For three years after closing, Landmark will continue to operate as an acute care hospital, with an emergency department open 24/7 and an independent medical staff;
• Prime will satisfy all amounts owed under the Steward (as a successor in interest to Caritas Christi Healthcare) outstanding indebtedness (estimated at $2,500,000);
• Prime will satisfy all amounts owed under the Northborough Capital Partners (as successor interest to CRB Holdings) outstanding indebtedness (estimated at $1,600,000);
• Prime will satisfy no less than four million four hundred thousand dollars ($4,400,000) of the Estate’s indebtedness to Blackstone Medical Center, Inc., f/k/a Steward Medical Holdings Subsidiary Four, Inc. under the working capital loan agreement;
• Prime will pay up to three million five hundred thousand dollars ($3,500,000) of the “tail insurance” malpractice premium;
• Prime will provide the Estate with a line of credit, with the total amount drawn being forgiven at closing;
• Prime will pay seven hundred and fifty thousand ($750,000) to the Estate at closing for the satisfaction of outstanding Estate expenses;
• Prime will assume the payment obligation for any and all post-Mastership payables;
• Prime will provide a deposit of one million dollars ($1,000,000).
Altogether, Prime Healthcare has agreed to invest more than $60 million in Landmark during the next 5 years.
With 1,300 employees, Landmark is the second-largest economic driver in northern Rhode Island, and the only hospital serving Woonsocket and northern RI communities. It has been in a years-long search for a potential buyer that could restore it to fiscal health, preserving the hospital as a local healthcare resource.