Attorney General Becerra Conditionally Approves Sale of Seton Medical Center and Seton Coastside to AHMC Healthcare

California law requires Attorney General oversight of the sale of non-profit health facilities  

SACRAMENTO – California Attorney General Xavier Becerra today issued a letter conditionally approving the sale of Seton Medical Center and Seton Coastside, medical facilities owned and operated by Verity Health System (Verity) that serve San Francisco and San Mateo County, to AHMC Healthcare Inc. Under California law (Corporations Code section 5914 et seq., and California Code of Regulations, title 11, section 999.5), any proposed sale of a non-profit health facility to a for-profit corporation must secure the approval of the state Attorney General, whose statutory charge is to determine whether the transaction is in the public interest and if the transaction impacts the availability or accessibility of healthcare services to the affected community. The Attorney General’s conditional consent represented in today’s letter seeks to protect access to care for the Bay Area communities served by the hospitals. If Verity and AHMC close on the sale with the conditions outlined in the letter, they consent to comply with the conditions. 

“As the COVID-19 public health crisis continues to mount, it’s crucial that California communities have access to lifesaving hospital care,” said Attorney General Becerra. “That’s why the conditions we have attached to the proposed sale of Seton focus on improving care and services at the facilities – increasing the amount of charity care, the benefits to the community, and investment in improvements for the facilities. At the California Department of Justice we have a responsibility to make sure that neither a change in ownership nor bankruptcy filing can diminish the quality of care that our communities rely on. Today’s approval keeps it that way.”

The Attorney General’s conditions are based on an independent health expert’s in-depth analysis of the health and medical needs in the surrounding communities. Among other things, these conditions call for AHMC, the prospective purchaser, to: 

• Maintain Operations at the Hospitals: 
  • Requires that AHMC keep Seton Medical Center and Seton Coastside open for at least 5.5 years after the sale and continue operating as a general acute care hospital and skilled nursing facility. Seton Medical Center will continue to provide cardiac services, critical care services, psychiatric services, women’s health services, and sub-acute and emergency department care;

• Strengthen Charity Care Policy:
  • Requires that AHMC increase the reach of its charity care policy at Seton Medical and Seton Coastside by covering care in full for individuals who are uninsured and underinsured, serving those who earn at or below the 250 percent of federal poverty level ($31,900 for an individual and $54,300 for a family of three), partial charity care covering individuals from 251 to 350 percent of federal poverty limit (up to $32,585 for an individual and $43,093 for a family of three), and a discounted policy for those between 351 and 500 percent of federal poverty limit (up to $63,800 for an individual and $108,600 for a family of three) for the discount payment policy;
  • Requires that AHMC commit $1,055,863 in charity care for patients in the surrounding community for six fiscal years;
• Increase Community Benefits: 
  • Requires that AHMC increase the community benefit of Seton and Seton Coastside to $704,864 for six fiscal years for the Health Benefits Resource Center; and RotaCare Clinic;
• Maintain Safety in Hospitals:
  • Requires that AHMC commit the necessary investments required to maintain seismic compliance at Seton and Seton Coastside until at least 2030. The expert report identified seismic issues at Seton; and
• Maintain Access to Care for Women and LGBTQ individuals:
  • AHMC is required to maintain access to women’s healthcare services for 5.5 years. They are also prohibited from placing limitations on LGBTQ healthcare services offered at Seton. 

 A copy of the conditional approval letter is available here.