LITTLE ROCK Medical Facilities Corp. of Toronto has entered into a definitive agreement to acquire a 51 percent interest in physician-owned Arkansas Surgical Hospital in North Little Rock for $36.2 million.
Boards for the company and the Arkansas Surgical Hospital LLC have approved the deal, according to a release from Medical Facilities.
The company owns 51 percent of four other specialty surgical hospitals, in South Dakota and Oklahoma, along with an ambulatory surgery center in California, the release said.
“Arkansas Surgical Hospital is highly regarded for the quality of its care and services,” Medical Facilities said in the release. The transaction should be completed by Nov. 30.
Hospital Chief Executive Officer Carrie Helm said in a separate release that “amid the uncertainty in health care today, this relationship solidifies Arkansas Surgical Hospital’s ability to provide exceptional care into the future.”
The hospital plans no management changes, according to the release.
The Affordable Care Act, passed in 2010 and often called Obamacare, overhauled the nation’s health system and made it difficult for physician owned specialty hospitals to be built or expanded.
The act set a Dec. 31, 2010, deadline for planned physician-owned hospitals to be certified for Medicare and Medicaid reimbursement.
Arkansas Surgical, which has 51 beds, had planned a $500,000 expansion but scrapped the project. More than half of the hospital’s revenue is derived from Medi- care and Medicaid.
Physician-owned hospitals, including Arkansas Surgical, sued the U.S. Department of Health and Human Services, which had targeted such institutions because of what it called a conflict of interest. The department said the same doctors who rendered services also made a profit from operation of the hospitals.
Arkansas Surgical was one of 235 such hospitals that were kept from expanding because of the law, said Leslie Fossey, spokesman for the Physician Hospitals of America, a trade association.
The hospitals argued that they offered better care than hospitals in general and that the Affordable Care law violated the Constitution. The U.S. Supreme Court on June 28 upheld the act’s constitutionality.
Shares of Medical Facilities closed at $13.64, up 5 cents, in over-the-counter trading Wednesday.
Business, Pages 27 on 11/15/2012
Print Headline: NLR hospital sells majority stake