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Carondelet Health agrees to sell two KC area hospitals

By Mike Sherry | July 28, 2014

A West Coast hospital company has agreed to acquire two hospitals and other related facilities as part of a deal with Kansas City, Mo.-based Carondelet Health, the parties announced Monday.

The buyer is Ontario, Calif.-based Prime Healthcare Services, which has signed a letter of intent that includes the acquisition of St. Joseph Medical Center in south Kansas City and St. Mary’s Medical Center in Blue Springs.

St. Joseph Medical Center

St. Joseph Medical Center in Kansas City, Mo., pictured here, and St. Mary's Medical Center in Blue Springs, Mo., are slated to be sold to Prime Healthcare Services Inc. of Ontario, Calif.

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Carondelet Health is part of Ascension, of St. Louis, the nation’s largest nonprofit Catholic health system.

A news release said that three Carondelet Health long-term care facilities - Carondelet Manor, Villa Saint Joseph and St. Mary’s Manor - would remain part of Ascension along with the two hospitals’ charitable foundations.

Terms of the deal were not disclosed.

According to a news release, St. Joseph and St. Mary’s have 450 beds and 900 physicians on staff combined.

Ascension had previously announced a deal to sell the two hospitals and related facilities to HCA Midwest Health System, but the deal fell through earlier this year because of federal regulatory concerns.

Prime Healthcare acquired Saint John Hospital in Leavenworth and Providence Medical Center in Kansas City, Kan., last year from SCL Health System, a nonprofit, faith-based health system in Denver.

Only a few months after the deal, SCL sued Prime Healthcare for alleged breach of contract and infringement of intellectual property. The case involved billing practices.

In January, a federal judge remanded the case to the District Court of Leavenworth County, Kan.

The deal with SCL required the approval of Kansas Attorney General Derek Schmidt, who reviewed the transaction because it involved the transfer of nonprofit medical facilities to a for-profit company.

Ascension spokesman Nick Ragone referred questions about any such review of Carondelet deal to the office of Missouri Attorney General Chris Koster. His media relations office did not have an immediate answer.

Prime Healthcare came under scrutiny by a nonprofit investigative news organization in 2011 for allegedly questionable Medicare billing practices.

Prime Healthcare has put an emphasis on acquiring struggling hospitals. According to the news release announcing the deal, the company’s motto is “Saving Hospitals, Saving Jobs and Saving Lives.”

“Our goal in working with the Board of Carondelet Health during this process has been to strengthen the ministry so its associates, physicians and volunteers are able to continue to provide exceptional, caring health services to the community for years to come,” Robert J. Henkel, executive vice president of Ascension and CEO of Ascension Health, said in the release.

“We believe this is a positive step for the greater Kansas City community as well as our colleagues at Carondelet Health," Henkel said. "Meanwhile, Ascension will continue to serve the community by helping to meet the growing need for senior services.”

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