Attorney General Becerra Reaches Settlement with Verity Health on Conditions of Transfer of St. Francis Medical Center

Settlement requires St. Francis Medical Center to commit to charity care and community benefit services to families served by hospital  

SACRAMENTO – California Attorney General Xavier Becerra today announced a settlement with Verity Health System of California, Inc. (Verity) and Prime Healthcare Services, Inc. (Prime), putting in place additional conditions on Verity's sale of St. Francis Medical Center in Los Angeles County to Prime. The settlement requires Prime to provide funding for charity care and community benefit services in the communities surrounding St. Francis over the next six fiscal years. 

“The California Department of Justice has a responsibility to the families who live around and rely on St. Francis Medical Center. The COVID-19 public health crisis has brought home the importance of having access to lifesaving hospital care nearby in our communities,” said Attorney General Becerra. “Today’s settlement ensures that St. Francis will continue to deliver services to the community through increased charity care, which helps those who don’t have coverage, and community benefit services to Los Angeles communities.”

Over the course of the six fiscal years of the deal, the settlement requires Prime to provide:

• $9.35 million per year in charity care, an increase of $1.35 million per year beyond what is required by court order, or a total increase of $8.1 million; and
• Approximately $1.6 million per year in community benefit services, an increase of nearly $458,000 per year beyond what is required by court order, or a total increase of nearly $2.75 million.

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 consider the factors set forth in the law, including whether the transaction is in the public interest and whether the transaction affects the availability or accessibility of healthcare services to the affected community. Today’s settlement resolves matters pending in bankruptcy court relating to the sale of St. Francis to Prime.

 A copy of the settlement is available here.