UPDATE: AG Vows Scrutiny As Special Master Seeks New Buyer For Landmark

Savage: Delay of $5,585,024 license tax critical to keep hospital afloat in search for another purchaser.


Landmark Medical Center's Special Master Jonathan Savage has filed a Superior Court response to delay a required $5,585,024 license tax to keep the hospital operating while seeking a new buyer to take Steward Healthcare's place.

Following the apparent logic in Savage's plea, Attorney General Peter Kilmartin's office, the regulator and frequent mediator of the deal to sell Landmark to Steward Healthcare, criticized the would-be buyer for its lack of commitment to rescue the failing hospital and pursuing the bottom line over the welfare of Landmark's patients. 

"While neither Steward nor the Special Master for Landmark have informed the Attorney General of their intentions, it appears, based on documents filed by the Special Master in Superior Court and comments by the Landmark spokesperson, that Steward has no intention to move forward in acquiring Landmark," wrote Amy Kempe, public information officer for Kilmartin's office.

A report today from WPRI.com, drew attention to the likelihood that Steward may back out of a long-anticipated deal to purchase the hospital, which has been seeking a buyer to rescue it from closing and restore it to fiscal solvency.  

Landmark spokesman Bill Fischer said that Steward Healthcare, which has until Sept. 30 to close on its deal to purchase Landmark Medical Center, has not formally backed out of the agreement.

However, he said, in the event that the deadline passes and the deal has not been finalized, or Steward does formally back out, Landmark needs to have a contingency plan in place, and they've been working on that contingency.

"We have had significant and productive conversations with one healthcare organization in particular," Fischer said. He would not say which one, however.

Fischer also said he could not comment on how likely it is that Steward would back out.

From the start, Kempe said, the state accommodated Steward’s every request for extraordinary treatment in hopes of returning Landmark to fiscal stability. "The Court amended the Asset Purchase Agreement between Landmark and Steward at Steward’s request. The General Assembly amended the Hospital Conversion Act (HCA) at Steward’s request. The regulators – the Department of Health and the Attorney General – completed the review and approval of the HCA application well in advance of the statutory 180-day deadline.  Further, the Attorney General has approved multiple requests to extend the closing deadline," she wrote.

But, despite Kilmartin's efforts and a request that both parties keep the Attorney General apprised of progress, "In fact, it is clear that neither Steward nor the Special Master have made a real effort to meet the conditions set forth in the HCA approval granted on May 25, 2012," Kempe wrote.

"In view of the apparent withdrawal of Steward Healthcare as the purchaser of the hospital assets, it is essential that the Special Master have additional time to negotiate a sale to another prospective purchaser," Savage wrote, "Requiring immediate payment of the license tax will surely foreclose that possibility."

Savage's response was filed to a motion from RI Tax Administrator David Sullivan to compel Landmark Medical Center to make the payment. 

The failure of the Hospital would create severe harm for other creditors, who have made administrative super-priority secured loans to Landmark and would "extinquish the prospect for successful conclusion of the mastership," Savage wrote. "In contrast, the hardship to the state would not be nearly as great."

Savage added that forestalling the immediate payment of the licensing fee would be consistent with the legislative intent of the General Assembly, and "...advance the paramount public interest in preserving LMC as an essential healthcare resource in Northern Rhode Island."

Savage further argued that the courts have discretion to determine when, if at all, administrative claims such as the RI Tax Administrator has made should be paid.

"If the estate were required to direct funds to pay the License Tax now rather than direct those funds towards patient care, the public welfare the operations of the hospital, patients and patient care will all be subjected to substantial risk. Clearly, the potential risk to patient care and LMC's operations outweighs the State's interest in immediate payment," Savage wrote. 

"This process has been very stressful on the patients who rely on Landmark for quality healthcare services, the 1,200 employees and the Woonsocket community, who embraced Steward as a savior for the City.  It has become very clear that Steward’s only interest was the bottom line, not, as the company claimed, the patients, the employees or the Woonsocket community.  Sadly, it appears that Steward has left the hospital, its patients and its employees in a worse position, as the process seems to be moving back to square one after four and one half years," Kempe wrote.

"After two failed attempts to find a suitable buyer for Landmark, however, Attorney General Kilmartin cautions that the level of scrutiny of any potential buyer cannot be lessened.  It is more important than ever to ensure that the next suitor is serious and qualified," Kempe wrote.  

la_mouffette September 26, 2012 at 05:38 PM
the tax is five and a half MILLION dollars?!???!! Are you SERIOUS??
Doctor September 26, 2012 at 06:05 PM
The closing of Landmark would be devastating not only to Woonsocket and the surrounding local town but especially to the northwestern part of the state which utilizes the hospital in emergency situations. This could mean a life or death situation and for the first time I can say that if the government wants to get involve in private matters here is the chance because lives are at stake, not only profit.
Lynn B September 26, 2012 at 08:49 PM
Maybe why they are in debts.Kind of a high tax. Why should the state tax hospitals that high?
Lynn B September 26, 2012 at 08:50 PM
Hoping someone can buy the hospital,and keep it in Woonsocket,where a hospital is very much needed.
RonW September 26, 2012 at 10:04 PM
Steve September 26, 2012 at 10:08 PM
Milford Regional, 20 minutes away and always accessible. But wait, I can't drive across Woonsocket to go to Walmart, right? Get over it Woonsocket, the city is dead and the state is dying a slow death! Companies are leaving Woonsocket and RI left and right, and wait until the beginning of 2013. The final nail in coffin will be driven in the form of again, higher taxes to cover for the total incompetence of our local Democratic politicians and state reps. Why is anyone surprised? You think it's bad now, wait............
Still Hope September 26, 2012 at 10:12 PM
I'm on the opposite side of the argument. I say let such a thing flounder in it's own mismanagement. It serves more of a convenience, rather than a necessity. Half of the building is a long term nursing home. The second biggest use is for extended stays for chronic conditions. Another large portion is the psych-ward. All of these functions could easily be sought from other institutions. What would be missed are the ICU, ER, and maternity. Maternity is usually preplanned, so this is still a matter of convenience. Sure there are some cases where you gotta poop out a baby within minutes, but for most of us, a ride to Prov won't jeopardize the baby. The ICU is another semi-convenience. Once someone has been stabilized, this is usually where they go for more accute conditions. Once again, after being stabilized, an ambulance ride to a nearby facility would be an alternative. The ER is the one and only saving grace of this institution. However, most of the same services can be found at local Urgent Care. Sure, middle of the night car crashes will get slower response. But, most of what the ER takes in on a regular basis is usually trivial. Also, the technology and training from city rescues is what saves a person's life, especially in Woonsocket, where most cases are cardiac arrest or falling down. I'm sure we all have anecdotes of someone we know making fine use of the facilities, but I wonder how much we would actually miss it.
Save LMC September 26, 2012 at 11:27 PM
You will miss it when a critical patient is waiting for a rescue. All Fire Trucks are set up to provide advanced life support and most personnel are EMT Cardiac level but waiting for a rescue while performing time sensitive interventions like management of the heart attack or CPR is not an effective way to ensure life safety. Eventually a life will be affected.
The Rocket September 26, 2012 at 11:32 PM
It's always been about the bottom line,no surprise here.If they still take over,they'll want a tax break down the road from Woonsocket taxpayers... because the City will have become addicted to the revenue.
disgusted September 26, 2012 at 11:42 PM
Landmark will certainly be missed! 1200 employees standing in the unemployment line, not only have they not have wage increases for years, they have been robbed of vacation time and sick benefits, and also have had their pensions frozen, all the while continuing to care for our loved ones in this community. Sure there are other nearby hospitals, but there are also countless lives that have been saved because we have a local facility! shame on you blue cross! For reimbursement rates lower than average, and shame on the government for allowing this monopoly corporation to get away with this!
Stan September 27, 2012 at 12:47 AM
Steve, there may be some problems with RI health insurers coverage crossing state lines, as well as ambulances from RI bringing people to Mass hospitals.
Lavergne September 27, 2012 at 01:42 AM
Where were our Reps, Economic Director and so on trying to save this deal??? Or was it the State screwing with us once again?
Dennis Lauzon September 27, 2012 at 02:05 AM
Still hope, you certainly would be the one missing it if you were having that heart attack or stroke. A rescue team can do just so much. A true ER unit is a absolute necessity when you are coding or having an aneurism. By the time the rescue team gets you to providence it will be time for your last rites. A four to five minute ride vs a twenty or twenty five minute ride is a matter of life and death. Either you just don't get it or you just don't care.
la_mouffette September 27, 2012 at 02:22 AM
This isn't about provincialism, Steve. It's not about people who don't want to drive half an hour to see a movie...we're talking emergency medical care in a dense urban area.... apples to oranges. 20 minutes is a hell of a long time when someone is having a stroke! That you pointed to Milford makes me think you're not from Woonsocket. Emergencies from here would probably be run to Providence or Pawtucket, I think. Slightly closer, in terms of transport, thanks to the highways.... and frankly, I'd choose to go south in certain emergencies. According to Healthgrades.com, Compared to various RI hospitals, Milford gets a much lower grade for treatment of stroke victims.
David T September 27, 2012 at 02:30 AM
A great hospital, a river, a bike path, a railroad, great restaurants, stadium theater, good schools, low real estate prices, etc. Some of these things we have. Others are part of the dream. To me the hospital is another great potential, a piece of the puzzle. A source of tax revenue if profitable. If someone comes in and turns this hospital into a better place, in the future I could choose it over places like Worcester or Providence for certain operations and so would other people. It could become an anchor for better outpatient services that currently you need to go out of the city for. So I say, whatever it takes, find a for-profit buyer and keep a full functioning hospital in the city. By the way, Walmart is returning to Woonsocket next summer, in the same location, with the bigger addition. Again, more tax revenue that we desperately need. I hear Staples is leaving as well as Lowes. So let's not throw in the towel.
John Silva September 27, 2012 at 02:43 AM
My mom and dad live in Creapeu Court. How are they supposed to get medical treatment? All the taxes we pay and they don't get help? This is exactly what Rep. Brien, Baldelli and Phillips brought on us.
la_mouffette September 27, 2012 at 02:51 AM
The local urgent care is not 24 hours, nor do they have emergency OR. If I think I have pneumonia or Lyme disease or a broken finger, I'll happily go to Urgent Care. It's pleasant and quiet and the turn-around time is fantastic. But if someone is having a major heart attack in the middle of the night, they are of no use whatsoever...and that lost time is a very big deal. Additionally, Landmark is one of the biggest remaining employers in the city, and if Steward had purchased it, it also would have begun paying taxes into our bone-dry coffers. If this deal falls through and the hospital fails, another glimmer of hope dies out for us. Some of us who have been thinking about the details and connecting the dots are very concerned about losing it, for reasons unrelated to anecdotes!
Sue G September 27, 2012 at 09:13 AM
Steve, Milford is a fine hospital. Too bad that most insurance is not "portable" across state lines.
Gonetothe dogs September 27, 2012 at 05:04 PM
To those of you that think Landmark should just close down. Think about a few things. If the rescue goes out on a call and now has to transport the patient to RI Hosp or any other hospital out of town, what happens if another rescue call comes in 15 minutes after the first call??? Have any of you been to the RI Hosp ER lately? It makes Landmark look like a trip to Disney World. I spent 4 days in Landmark last year, and the care I received was excellent. I broke my leg and needed surgery to repair the break and the surgeon on call that day was wonderful. Any one needing to go to the hospital for any reason will now have to find new doctors, or all of the existing dr's in Woon will need priveliges in other hospitals. It would be a great hardship on thousands of people in the northern part of the state! It's too bad that the governor is busy trying to save a murderer instead of trying to save this hospital!
PATRICA LABOSSIERE September 27, 2012 at 05:09 PM
go to milford regional much better hospital!! quality care , great bwh cancer center, and they know their stuff! your in the medical field to help people an save lifes, waaa waa waais all i am haring about these employees paychecks.. such i life !! you still have a job be greatful,and try thinking about the patients for once!! i have a great phlebotomy job with a top laboratory!!
English first September 27, 2012 at 06:01 PM
Patricia It must be nice to have a car.
la_mouffette September 27, 2012 at 06:20 PM
heh, our administration offered them a PILOT, despite the fact that they didn't ask for one. ahh, man. And yeah, I'd much rather it be non-profit than for-profit, in a healthy prudently-managed Woonsocket! But I'd much rather it be open and well-run, then to totally implode =/
la_mouffette September 27, 2012 at 06:26 PM
Pat, Sure, I'd go to Milford....for something prescheduled. Then again, if we're talking about a 20 minute commute, I have my choice of a whole variety of hospitals, many of which have much better healthgrade rankings for various services. The problem with losing Landmark is, I'm not very concerned with prescheduled services. If someone I love has catastrophic bleeding in the brain, that 20 minute ride is not going to help things.
la_mouffette September 27, 2012 at 06:27 PM
John, you are a one-note song.
Gonetothe dogs September 27, 2012 at 06:49 PM
Patricia, BC will only pay 80% to out of network providers, so the patient is responsible for the remaining $$. I know I pay alot of money out of pocket for BC, so I don't want to have to pay more $$ to drive further, to see dr's that I don't know and then have to pay additional charges for being out of network. I have been going to the dame GP for 30 years. I don't want to have to get a new Dr. Not to mention that many dr's are not taking on new patients!


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