Lawmakers call for AG review of failed Bradford hospital sale
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A pair of state lawmakers are concerned with the inability of Kaleida Health to complete an agreement to transfer ownership of the former Bradford Regional Medical Center campus to the Lake Erie College of Osteopathic Medicine – with both lawmakers calling on an Attorney General's office investigation.
It had been announced in February that LECOM and Kaleida Health were in discussions regarding LECOM acquiring the Bradford Regional Medical Center (BRMC) campus, including The Pavilion, the 95-bed skilled nursing facility. The acquisition was subject to the negotiation and execution of definitive agreements between LECOM and Kaleida Health, as well as the receipt of all necessary regulatory approvals.
Those talks broke down in early September, when the LECOM board voted Sept. 8 to end the discussions. One sticking point was a proposed stipulation preventing LECOM Health from starting clinical services in Bradford that would compete with Kaleida’s Olean General Hospital in New York.
The end of the deal means Kaleida is moving ahead with plans to close The Pavilion, with a scheduled closure date of Dec. 1.
"Here are the facts: After months of discussion and negotiations, Kaleida Health failed to negotiate in good faith," Rep. Martin Causer, R-Bradford. "At a recent meeting with the Pennsylvania Office of Attorney General, Kaleida Health notified LECOM they now refuse to sell the building to them. They alternatively stated that they might lease the building, but LECOM would have to accept a noncompete agreement in perpetuity. This would effectively ensure that BRMC would never again operate as a hospital. That is what this has always been about - Kaleida Health doesn't want to provide hospital services in Bradford, and they are 100% focused on preventing any other healthcare system from providing the care our citizens need and deserve. Kaleida Health and Olean General Hospital are benefiting to the tune of millions of dollars because there is no hospital in Bradford. I strongly believe this is a violation of antitrust, and I have called on the PA attorney general to investigate Kaleida for such."
State Sen. Cris Dush, R-Brookville, said Monday that the situation facing Bradford is unacceptable. He raised concerns over the non-compete clause on all attempted purchasers of the Bradford Regional Medical Center, terming it 'forced service market segmentation' that he said violates the federal Sherman Anti-Trust Act.
"Given the potential implications for preserving healthcare competition and rural healthcare access throughout the Bradford region, these issues warrant appropriate review under applicable state and federal law, including federal anti-trust law," Dush said. "I also intend to ask the Pennsylvania Attorney General's Office to fully review the original transaction that resulted in Kaleida Health’s control of Bradford Regional Medical Center and to examine whether the commitments and charitable purposes associated with that transaction have been appropriately maintained."
Dush specifically is asking the Attorney General's Office to review the original charitable purpose of Bradford Hospital, including the 1885 Articles of Incorporation and subsequent amendments, and whether those documents establish continuing restrictions or obligations concerning charitable assets; 2018 merger and related transaction documents, including the treatment of Bradford Hospital's charitable assets and any provisions concerning the Bradford community; the current ownership, control and disposition of any remaining charitable assets or interests associated with Bradford Hospital; whether any charitable assets or interests should continue to be used for a charitable purpose benefiting the Bradford community, including whether a local charitable organization or foundation may be an appropriate successor recipient; the reported non-compete requirement associated with the potential sale of the former hospital facility, including whether the restriction could raise concerns under Pennsylvania or federal antitrust law; and whether any additional oversight, investigation, court proceedings or corrective action is warranted to protect charitable assets, preserve the charitable purposes for which they were established, and protect competition and access to health-care services in the Bradford area.
"Regardless of any pending or future investigations, I will continue moving forward with Bradford area community leaders, McKean County officials, healthcare organizations, and local, state and federal partners to identify innovative and affordable healthcare solutions our citizens and patients expect and deserve. Of course, none of these outcomes are possible without first establishing a foundation built on maximum transparency and accountability," Dush said.