Hearing on Meadows-HCA Merger Set for March 25
The acquisition of Vidalia’s Meadows Health by Hospital Corporation of America (HCA) is moving toward a projected April 30 completion. The transaction will not be finalized, however, until a public hearing is held and the proposed merger gains a nod from Georgia’s State Attorney General. That public hearing has been scheduled for Thursday, March 25, at 2 p.m. at Southeastern Technical College. Comments may also be made virtually or by mail. (See box accompanying this article.) Since MRMC is a community-owned, notfor- profit facility being sold to a for-profit entity, the hearing and state’s approval are part of the process for assuring the community that the transaction is being handled in a fair and transparent way, said MRMC CEO Alan Kent. Meadows Health Alliance, Inc., (MHA) the parent company of Meadows Regional Medcontinued from page
ical Center, signed a letter of intent for a merger with HCA in September 2019. In January, MHA, the Board of Directors of Meadows Health Regional Medical Center, and the Toombs County Hospital Authority approved the sale of the medical center and most of its assets for $73 million.
Kent noted that HCA has agreed to assume the hospital’s existing HUD debt of $52.8 million in its entirety. Net proceeds after the assumption of the debt are expected to be $30 million. These funds will be managed by a newly-created Meadows Foundation, a not-for-profit organization that will directly benefit the community. Kent said that $10.3 million will be placed in escrow against potential future liabilities. In addition to the purchase price, HCA has committed to capital expenditures of at least $10 million over the five-year period following closing.
Some of Meadows assets are not included in the acquisition: the Thompson property adjacent to Meadows Park, 22 acres east of the hospital currently under option to the Toombs County Development Authority, and the Sweet Onion Hospitality House.
As a for-profit stock corporation whose shares are traded on the New York Stock Exchange, HCA will pay income, sales and local property taxes, which was not the case with the tax-exempt, not-for-profit MRMC, Kent pointed out. “HCA is expected to generate significant tax revenue which will benefit the local governments and schools,” Kent emphasized.
HCA will establish an advisory board whose purpose is to fulfill any governance accreditation requirement of the hospital such as reviewing annual budgets, capital plans, provider credentialing, and overseeing HCA’s covenants relating to community benefit provided in the purchase agreements. The advisory board will initially be composed of three individuals from the community appointed by Meadows and three individuals appointed by HCA.
HCA has agreed to maintain core services for a period of 10 years (with some conditions) and has guaranteed to preserve and enhance high-quality healthcare services in Toombs County and the surrounding areas. Meadows Cancer Center, the Interventional Cardiology Program and the Obstetrics Program will be continued by HCA, Kent said.
HCA has a policy to serve Medicaid and indigent patient populations that includes providing free, nonelective care for uninsured patients whose income is less than 200% of the Federal Poverty Level (FPL), with a tiered approach up to 400% of the FPL. This policy is more extensive than MRMC’s, Kent said. Kent explained that HCA will offer employment to all Meadows employees who are in good standing as of the closing of the proposed transaction at current salary levels and with similar job titles and responsibilities. HCA will not terminate employees without cause for one year following the closing except in the event of a further COVID-related resurgence. HCA has the ability to flex the number of hours worked by hourly paid employees. He added that HCA offers employees the opportunity for upward mobility and growth within the HCA organization.
Meadows employees will transition to HCA benefit plans with recognition and credit for tenure at Meadows and participation in all plans on day one without regard to any preexisting health conditions with respect to the health and disability plans. Contracts for all physicians now under contract at Meadows will be immediately extended by HCA.
In commenting on the future of the current boards serving MRMC, Kent said these entities will have continuing responsibility to wind down the operation of MRMC over the next few years. “We still have to do final audits, income tax returns and cost reports to the federal government. These cost reports take three years or more for the government to audit and settle.” Kent said going forward it is likely that some of the boards will eventually be modified or merged. He said it is yet to be determined who will be serving on the new HCA board. The inaugural board of the new Meadows Foundation will be made up of the five current members of the executive committee from the MRMC and the MHA boards. It will be the job of the Foundation board to manage the $30 million in proceeds from the sale of MRMC and to establish a foundation to serve the community. The operations of this selfperpetuating board will be defined and published.
“This foundation will be a grant-making foundation. It will not make grants to individuals and it is not for indigent care since HCA will provide that. It is being established for the community’s benefit and possible uses might be for health education and community wellness,” Kent said. This Foundation, expected to be put into place quickly, will not create programs on its own but will receive grant applications from organizations and groups within the community.
