Health care operator eyes distressed Topeka hospital


TOPEKA, Kan. | A group that specializes in turning around distressed hospitals has expressed interest in acquiring a Topeka hospital whose financial troubles have reinvigorated debate about Medicaid expansion in Kansas.

California-based Prime Healthcare’s nonprofit arm notified Gov. Sam Brownback last week that it has “potential interest” in “saving” St. Francis Health. The letter from Prime Healthcare’s general counsel, Troy Schell, was given anonymously to The Topeka Capital-Journal and also provided to The Associated Press.

The nonprofit Catholic hospital’s Denver-based owner, SCL Health, said just days earlier that it would stop operating the 378-bed hospital whether or not it is successful in finding a buyer. SCL Health spokesman Brian Newsome said in a statement that “there are among a number of parties who have come forth to discuss potential scenarios.”

Brownback spokeswoman Melika Willoughby offered a similar assessment, saying the “the community of Topeka will have multiple options to keep the facility open.” Among those is the possible involvement of a 586-bed hospital within blocks of St. Francis. Stormont Vail Health system President and CEO Randy Peterson said it began talks last week with SCL Health and is interested in taking over St. Francis’ operations.

St. Francis hospital’s problems also have advocates promising to push again to expand the state’s Medicaid program under former President Barack Obama’s signature health care law. The advocates have warned that without Medicaid expansion in the GOP-led state, hospitals will suffer financially because of uncompensated care. But it’s not clear that they can pick up enough votes in the Republican-controlled Legislature to overcome opposition from Sam Brownback, who vetoed an expansion bill last month.

Prime, which along with its nonprofit arm owns and operates 44 acute-care hospitals, said that it has “built its business on saving and turning around distressed hospitals.” The Capital-Journal reports it also has faced multiple lawsuits along with angry employee unions in communities where it works or is taking over hospitals. In one whistleblower lawsuit, it’s accused by the U.S. Department of Justice of driving up Medicare billings with admissions that weren’t medically necessary.

In 2013, Prime bought two other SCL Health hospitals, Providence Medical Center and St. John Hospital, both in the Kansas City area. Joe Connor, a Kansas City, Kansas, man who sits on the community advisory board for Providence, said his community’s experience with Prime has been positive. Connor said Providence was operating in the black on monthly reports within six months of the purchase. He attributed that to its “singular” focus on its mission.

Employees of both Saint John and Providence also sued Prime and SCL Health over failure to receive a promised severance package after the sale was completed, according to Becker’s Hospital Review.