L+M application to buy Westerly Hospital now complete
The 90-day review of Lawrence + Memorial Hospital's application to purchase The Westerly Hospital began Tuesday, after Rhode Island state regulators announced that the application had been deemed complete.
"This is a significant and welcome step," L+M President and Chief Executive Officer Bruce Cummings said in a news release. "We look forward now to working further with state regulators and with (Attorney Mark Russo) to bring this transaction to a quick closing so we can provide stability to The Westerly Hospital and the communities it serves."
Russo was appointed by the court in December 2011 as the special master in charge of Westerly Hospital during the receivership process.
Dara Chadwick, spokeswoman for the health department, said the application will be reviewed over the next 90 days by the department, the Rhode Island Attorney General and the Health Services Council. The council will then make a recommendation to the state director of health, Dr. Michael Fine, about whether the sale should be approved. Public hearings will be scheduled.
L+M submitted its three-part application to state regulators in November to purchase the smaller hospital for $69 million in cash and other financial commitments, two months after the judge presiding over the receivership case approved L+M's bid. Rhode Island officials twice requested additional information before deeming the application complete.
"The Westerly Hospital has provided great care for generations," Cummings said. "That won't change — nor does our commitment for again making it a strong and viable community hospital."
According to Rhode Island law, any change of owner of a hospital must receive approval from both the attorney general's office and the Department of Health by making a Change of Effective Control application and also completing filings under the state's Hospital Conversion Act.
The three L+M applications were the first to be made under a new process available in Rhode Island to expedite regulatory review for a hospital that is financially distressed and is to be acquired by another nonprofit hospital.
L+M said it hopes for approval within 90 days. It has already taken several steps in preparation for the acquisition, such as offering Westerly Hospital physicians the opportunity to join Lawrence + Memorial Physicians Associates.
"From the start of this process, the hope was to bring stability to The Westerly Hospital as soon as possible," Russo said. "Now, we are one step closer to that reality — and we look forward to a swift conclusion."
In its application, L+M is offering to assume $22 million in Westerly Hospital debts, infuse $6.5 million in cash in the first two years to fund a turnaround plan and another $30 million in equipment and facility upgrades over the next five years.
While the two hospitals will have the same corporate parent, they will have separate licenses, medical staffs and tax status. Westerly Hospital would also retain its name, with the L+M affiliation added.
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