Memorial Mission Medical Center last week completed its acquisition of 275-bed St. Joseph's Hospital, agreeing to state-imposed terms and leaving Asheville, N.C., with one private acute-care hospital.
Before they officially merged, the two hospitals signed an amended certificate of public advantage, or COPA, issued by the state health department, which grants them immunity from antitrust laws in exchange for some limits on how the merged hospital can operate.
Those limits include a cap on increases on charges for healthcare services and a promise to pay the difference if the savings from the merger fall short of the hospitals' $76.2 million goal.
Proceeds from the $90 million sale will go to the Sisters of Mercy of North Carolina Foundation in Charlotte.
The hospitals announced their intent to merge this summer. They initially signed a COPA in 1995 when they formed a joint operating company called Mission St. Joseph's Health System.
The hospitals hesitated to sign the first amended COPA issued Sept. 30 because they wanted the state to eliminate a requirement that no more than 15% of the merged organization's board members could be physicians.
The state removed the restriction but said any changes to the size or composition of the board will need to be submitted to the state 30 days in advance of the changes.
While the marriage was blessed by the state and quickly consummated, the controversy is still simmering.
All three HMOs covering state employees in Buncombe County, where Asheville is located, have notified the state employees' health plan that they are exiting that market because they were unable to get satisfactory contracts with the providers there.
"The rates were too high there, and we don't allow (plans) to charge higher premiums in one area of the state," said David De Vries, executive administrator of the state health plan.
The HMOs aren't the only ones wary of the merger's effects. Park Ridge Hospital in Fletcher, N.C., a 90-bed facility about 20 miles from Asheville, has talked to state officials about its concerns that the deal gives the Asheville system a big competitive advantage.
A 30-day public comment period on the COPA expires Nov. 27.