Attorney General Becerra: Bankruptcy Should Not Be Used as a Means to Evade Responsibility for Care of Patients

Wednesday, January 30, 2019
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Attorney General Becerra issues statement after bankruptcy judge allows purchase of hospitals by Santa Clara County without guarantees of outstanding protections and levels of service 

SACRAMENTO — California Attorney General Xavier Becerra today issued the following statement after a Los Angeles bankruptcy court denied a petition to suspend the sale of St. Louise and O’Connor hospitals, owned and operated by Verity Health Systems of California (Verity) to the County of Santa Clara, until existing patient protections and services at these hospitals were assured. Attorney General Becerra is entrusted with the responsibility under the state constitution and statutes to protect California patients’ access to care. The Attorney General's Office has fought to safeguard a set of important healthcare services that the Santa Clara community relies upon, including access to coronary care, emergency care, and intensive care services, like neonatal intensive care services.    

“Our message in court has been clear and simple. We take our responsibility to protect the health and safety of California patients and the Santa Clara community seriously,” said Attorney General Becerra. “From ensuring access to emergency care to women’s healthcare, the important patient protections that apply to Verity’s health facilities must be maintained in any transfer of these hospitals. This decision unfortunately strips our office of the authority to protect patients when hospitals are transferred to public entities like the County of Santa Clara. This is concerning, since the County of Santa Clara would not articulate which of these important patient protections and services that were a condition for the operation of Verity’s hospitals would survive in the transfer of ownership. Nor would Santa Clara County explain why it would not commit to maintain these levels of patient protections and services.”

In December of 2015, the Office of the Attorney General approved a change in governance and control of Daughters of Charity Health System to Verity Health Systems of California. The approval set legal conditions on Verity to ensure the continuity of essential healthcare services and protections for vulnerable communities served by Verity’s six hospitals statewide. On August 31, 2018, Verity filed for bankruptcy and on December 27, 2018, the bankruptcy court approved the sale of two of Verity’s hospitals to Santa Clara County: St. Louise Regional Hospital and O’Connor Hospital. The proposed sale to the County did not include the provisions that were legally placed on and agreed to by Verity and its facilities to protect specific essential healthcare services. Attorney General Becerra challenged and sought to suspend the sale of the hospitals in order to protect those essential patient services and protections for the people needing those hospital services. Today a bankruptcy judge denied the Attorney General’s request for a stay of the sale order.

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