BEND, Ore. (KTVZ) — The Oregon Health Authority has denied a request by St. Charles Health System to fast-track its plans to acquire the Orthopedic and Neurosurgery Care & Research Center, Willamette Week reported Thursday.
The center and St. Charles Health System announced last month that they had signed a letter of intent “to explore expanding their relationship to maintain and enhance access to orthopedic, neurosurgery, physical medicine and rehabilitation care in Central Oregon.”
“Transactions of this nature are reviewed under the Oregon Health Authority's Healthcare Market Surveillance program. However, given the urgency of the current situation and the threat to patients, the Center and St. Charles will seek an emergency waiver from the Healthcare Market Surveillance review process to expedite their integration plans and allow the parties to more quickly stabilize health care in the community,” St. Charles said at the time.
But OHA said St. Charles had not made a “specific statement” that it would hire existing staff at competitive salaries, Willamette Week reported. Regulators also reviewed the center's finances and concluded in an Aug. 2 letter that it showed some degree of financial stability and was “not under immediate threat of insolvency.”
Asked about a Willamette Week article that called the planned deal an acquisition, St. Charles Hospital spokeswoman Alandra Johnson said Friday that while details of the transaction have yet to be finalized, St. Charles Hospital expects to employ the majority of the center's physicians, medical personnel and staff — about 200 in total. “Much of the equipment will likely also be purchased.”
The OHA action only prevents expedited approval — regular approval is still a ways off, but Johnson said the timeline for the deal is “unclear.”
“Many of the details need to be worked out as part of the due diligence process that includes the intent of the center's medical professionals and staff to join the St. Charles team,” she told News Channel 21. “As the process progresses, additional information regarding details will be revealed. At this time, we anticipate the location of the clinic will remain the same as it is today.”
In a statement provided to News Channel 21 on Friday, Steve Gordon, president and CEO of St. Charles Hospital, said: “As we sought to convey in our filing, this news is disappointing and disturbing, given the gravity of the situation. We will continue to work constructively with OHA and follow the review process they have established. At the same time, we believe this action raises serious questions about the HCMO program itself and the merits of some sort of legislative reevaluation.”
Still, Willamette Week said St. Charles' actions indicate that OHA's Office of Healthcare Market Oversight may take a closer look at mergers as the industry consolidates.
Among the deals expected to be considered soon is a larger acquisition of Legacy Health by Oregon Health & Science University, which neither has yet sought approval from health officials.
