Prime Healthcare on Friday completed its acquisition of St. Joseph Medical Center in Kansas City and St. Mary’s Medical Center in Blue Springs.
The for-profit hospital chain based in California also acquired some other unspecified assets of Carondelet Health from Ascension Health, the St. Louis-based not-for-profit company that has owned and operated the hospitals.
The financials terms of the acquisition were not disclosed.
The two acute-care hospitals provide 456 inpatient beds and together have 900 physicians on staff.
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“Prime Healthcare looks forward to working with the physicians, nurses and employees at St. Joseph Medical Center and St. Mary’s Medical Center to ensure the best care for the patients they serve,” Prem Reddy, chief executive of Prime Healthcare Services, said in prepared remarks.
The acquisitions mean Prime Healthcare owns four hospitals in the Kansas City area. The company bought Providence Medical Center in Kansas City, Kan., and St. John Hospital in Leavenworth in 2013.
“Having four hospitals on both sides of the Missouri River gives us a significant market presence to better serve these communities,” said Luis Leon, president of operations for Prime Healthcare.
The three Carondelet Health long-term care facilities — Carondelet Manor, Villa Saint Joseph and St. Mary’s Manor — are not part of the sale. They, along with the hospitals’ charitable foundations, remain part of Ascension.
The Missouri attorney general’s office on Wednesday announced an agreement with Ascension to set aside $20 million from the St. Joseph and St. Mary’s sale to be kept in a charity account to be used for acute medical care in the Kansas City area. Precise uses of those funds were not spelled out.
Prime Healthcare, the nation’s fastest-growing hospital chain, had 29 hospitals as of late last year and was working to acquire 11 more. It continues to work on a deal to buy a six-hospital system based in the San Francisco Bay area.
Under Reddy’s leadership, Prime has expanded by acquiring troubled hospitals, especially those that were founded by Catholic religious orders and operated as not-for-profits.
Around the country, Prime has gained a reputation for being anti-union and for pumping up emergency room revenues. It has received U.S. Department of Justice scrutiny for alleged “upcoding” of hospital billing and coding to wrongly inflate Medicare reimbursements. Its expansions have been fought by the large SEIU labor organization.
In an interview last year with Modern Healthcare magazine, Reddy defended Prime’s coding practices and said he believed the company will be “vindicated.”
Prime was founded in 2001 and operated entirely in California until 2011. It expanded by buying hospitals in Texas, Nevada, Pennsylvania, Rhode Island, Kansas and New Jersey before adding the Missouri acquisitions. Expansion deals also were signed late last year to move into Alabama and Michigan.
Ascension and Prime signed a letter of intent concerning St. Joseph and St. Mary’s in July 2014. Ascension had been trying to sell St. Joseph and St. Mary’s to HCA Health Midwest, but regulators signaled that they wouldn’t approve that sale because it would have given HCA too large a market share in the Kansas City area.