HCA offers lifeline to Catholic system on 'brink of bankruptcy'

 Manchester, N.H.-based Catholic Medical Center was reported to be on "the brink of bankruptcy" before New Hampshire Attorney General John Formella approved its $110 million acquisition by Nashville, Tenn.-based HCA Healthcare on Jan. 6.

Here are 6 things to know: 

1. CMC and an HCA subsidiary signed an asset purchase agreement in early July, and Mr. Formella's office began the regulatory review of the acquisition. The review was extended in late December to Jan. 9 before it was approved on Jan. 6. The transaction is anticipated to wrap up in the coming weeks. 

2. The state's director of charitable trusts Jan. 6 report said that CMC's decision to sell the hospital was "largely the result of financial distress that has brought CMC to the brink of bankruptcy."

3. CMC reported a $45.6 million operating loss in fiscal 2023 and has projected losses of $41.5 million in fiscal 2024. CMS' debt is around $160 million, and operating cash losses have nearly triggered debt clauses that could force immediate repayment and risk bankruptcy. The system, which cut 142 positions in April 2024, has also been unable to affiliate with other organizations. 

4. HCA will assume ownership of "nearly all" of CMC's assets, including its 330-bed acute-care hospital and related healthcare services, under the acquisition, according to a Jan. 6 New Hampshire Department of Justice news release.

5. HCA will also commit $200 million to strengthening New Hampshire's healthcare infrastructure, including providing 10 designated receiving facility beds at its state hospitals within two years of the transaction closing. HCA will determine in its discretion what to do with the beds.  It will contribute $2 million to local community health initiatives in the next three years, which includes at least $300,000 in annual payments to Poisson Dental Clinic and Healthcare for the Homeless.

6. Other key terms of the acquisition include HCA providing critical healthcare services like emergency behavioral health and pregnancy care for at least 10 years after the acquisition. Data reporting requirements and safeguards against anti-competitive practices are also included to protect consumers and maintain transparency.

"It [the acquisition] ensures access to high-quality care close to home, preserves our Catholic mission and positions CMC to grow and adapt to the evolving needs of our patients," Tim Riley, chair of CMC's board of trustees, said in a Jan. 6 news release. "We are confident this decision will strengthen healthcare throughout the region for years to come."

https://www.beckershospitalreview.com/finance/hca-offers-lifeline-to-catholic-system-on-brink-of-bankruptcy-6-things-to-know.html