When it was jilted by Columbia/HCA Healthcare Corp. last month, Neponset Valley Health System said it was putting its sale on a fast track. Last week it became a dash.
That's because there's a shot at some fleeting Medicare prize money if the two-hospital Massachusetts system can finish the race to transfer its assets by Nov. 30. And a Boston-based suitor stands ready to help make it happen.
Caritas Christi Health Care System has proposed a full-asset merger under which the Catholic-sponsored system would assume responsibility for Neponset's $55 million in long-term debt. Neponset's board voted to enter a 30-day negotiation period to determine whether the two organizations are meant for each other.
Neponset did not rule out talking with other suitors, but it agreed not to ink a deal with anyone but Caritas Christi during the period, said spokeswoman Diana Franchitto.
After losing a shot at joining Columbia, Neponset was ready to write off any chance at an estimated $7 million to $9 million reimbursement from HCFA for asset depreciation. That's about what Neponset expects to lose on operations in fiscal 1998.
The federal government now pays a share of losses stemming from a sale or merger. A provision of the federal balanced-budget law, however, scratches this "recapture" opportunity at the end of November (Aug. 18, p. 2).
But within 24 hours of announcing the end of the Columbia deal, Neponset was approached by several healthcare organizations expressing significant interest, including the six-hospital Caritas Christi system.
At that point, board members decided they had a fiduciary responsibility to aggressively pursue the money within their grasp, Franchitto said.