Attorney General Tim Fox has approved the sale of the Community Medical Center in Missoula. His office issued this press release Monday afternoon:
HELENA - This afternoon, Montana Attorney General Tim Fox approved the sale of Community Medical Center in Missoula to a joint venture consisting of Billings Clinic and RegionalCare Hospital Partners. The proposed transaction had been under review since September. The Attorney General’s Office of Consumer Protection is still reviewing the proposal for the distribution of charitable assets, which Community Medical Center submitted last month.
Billings Clinic and RegionalCare Hospital Partners (RCHP/Billings) will pay approximately $74.8 million for Community Medical Center’s (CMC) assets. That price is at the high end of the independent fair market valuation range determined by the independent fair market valuation firm hired by the Attorney General, CBIZ Valuation Group. The sale price may change slightly at closing due to final adjustments, but it will not be less than the fair market value range.
Since CMC is a non-profit entity, by law the sale proceeds must be used for purposes closely aligned with CMC’s mission to provide healthcare services to residents of Missoula and the surrounding area. On December 15, 2014, CMC’s board of directors submitted a proposal for dispersal of those charitable assets to a new foundation and the University of Montana Foundation, but that proposal is still under review by the Attorney General’s Office. The parties have agreed on a February 27 deadline for that review.
“Over the last several months, we have conducted numerous interviews, analyzed hundreds of financial and legal documents from Community Medical Center, considered all public input, and have sought answers to the questions within our statutory scope of review,” Attorney General Fox said. “We have scrutinized this transaction to the fullest extent of the law and have found no legal impediments to it proceeding.”
Though not required to do so, since September the Attorney General’s Office has been soliciting public comment on the proposed transaction. More than 150 comments were submitted online and in writing. In addition, the Attorney General’s Office held a public forum in Missoula in November. Over 200 people attended the three-hour event.
“I am grateful to the hundreds of people who put forth the time and effort to submit comments and attend our public forum,” Attorney General Fox said. “The comments played an important role in our evaluation of the transaction, and even influenced many of the questions that we posed to both the buyer and seller.”
Terms of the sale include:
The buyer must maintain essential services currently offered at CMC.
- The buyer must continue providing charity care to the indigent and uninsured pursuant to CMC’s present charity care policy or one substantially similar.
- Over the next ten years, the buyer must spend at least $40 million on physician and provider recruitment and $60 million on other strategic initiatives (this is an increase over what CMC has spent historically and more than CMC expected to be able to spend in future years).
- The buyer must contribute 3% annually of the hospital’s net revenue for routine capital expenditures.
Once the transaction closes, CMC’s facilities will be owned and operated by RCHP Billings. CMC, Inc., will then exist as an entirely separate entity in order to resolve any outstanding liabilities. The Attorney General’s Office secured a post-transaction monitoring agreement that requires the board of CMC, Inc., to monitor and ensure the buyer abides by the terms of the sale. The Attorney General’s Office will also monitor the buyer’s performance to ensure compliance.
While the sale itself has been approved, the Attorney General’s Office will continue to accept public comment on the charitable asset use proposal. Comments can be submitted here.