OAKLAND – California Attorney General Rob Bonta today announced a consent decree that will address the potential anticompetitive effects of the merger of Providence Group, Inc. (Providence) with Plum Healthcare (Plum). Providence and Plum separately own several dozen skilled nursing facilities (SNF) throughout California, including two in rural Lake County. Following a joint investigation of the merger by the Federal Trade Commission (FTC) and the California Department of Justice’s Healthcare Rights and Access Section (HRA), the agencies determined that a consent decree with the companies would help prevent a SNF monopoly in the area and address concerns about the merger's anticompetitive impact, especially on vulnerable senior, rural and indigent consumers. Today, the Attorney General announced that to fulfill the terms of the agreement, Providence will sell one of its SNFs in Lakeport, a city in Lake County, as well as appoint a monitor to oversee the sale and safeguard patient care in the facility.
“While companies are accountable to their boards, as Attorney General, I’m accountable to the people of California,” said Attorney General Bonta. “We must assess the impact these transactions will have on the availability and cost of care for the patients who rely on care in these facilities. This merger raised red flags about healthcare competition in Lake County, which we have addressed by requiring Providence and Plum to sell part of their stake in the skilled nursing facility market in the area, and appointing a monitor to ensure cooperation with our terms.”
To fulfill the terms of the agreement, Providence will divest Rocky Point Care Center (Rocky Point), one of the two SNFs the company owns in the area. Today, the Attorney General requests that the Court approve this acquisition of Rocky Point by NAHS North, a subsidiary of North American Health Services (North American), and the purchase of the real estate interest in Rocky Point’s building by Sensen, LLC.
The Attorney General’s approval of the sale follows a thorough, joint review of North American by HRA and the FTC. The review determined that North American is well-positioned to effectively and successfully operate Rocky Point.
Attorney General Bonta also announced the appointment of a monitoring trustee to oversee compliance by all parties with the terms of the consent decree. Affiliated Monitors, Inc. will facilitate the orderly transition of Rocky Point from Providence to North American by ensuring all necessary equipment and records are included in the sale, all relevant operating licenses and regulatory approvals are transferred, and Providence refrains from poaching staff from the facility for a year after the transaction closes. The monitor will remain until all of Providence’s transition obligations under the consent judgment are complete.
HRA works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. HRA’s attorneys monitor and contribute to various areas of the Attorney General’s healthcare work, including consumer rights; anticompetitive consolidation in the healthcare market; anticompetitive drug pricing; nonprofit healthcare transactions; privacy issues; civil rights, such as reproductive rights and LGBTQ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products.
A copy of the propsoed consent decree is here.