The claim "no sale is ever final" holds true for the former Central Montana Surgical Hospital in Great Falls. The sale of the facility remains at the center of a specialty hospital battle, even after a court ruling permitted its purchase and the state health department granted it a new license.
On March 24, the same day a Montana judge denied an attempt to halt the hospital's sale, the for-profit Great Falls (Mont.) Clinic and its partner Essentia Health, a Duluth, Minn.-based not-for-profit health system, completed the deal to buy the 20-bed facility from Harold Poulsen. Terms of the deal were not disclosed.
Benefis Healthcare, the local community hospital that protested the deal, reacted to the judge's decision by filing an emergency motion for an injunction pending an appeal with the Montana Supreme Court on March 27.
And Montana's Department of Public Health and Human Services, a defendant in the case along with the Great Falls Clinic and Essentia, also weighed in. On the same day as Benefis' motion, it filed a notice of opposition with the state Supreme Court that said Benefis' motion is moot because the transaction has been completed.
At issue is whether the renamed Central Montana Hospital will function as a general services facility or a specialty hospital. Last year, the Montana Legislature banned the licensure of new specialty hospitals until July 2007.
"We have been accused by Benefis of intending to exploit a specialty hospital opportunity," said Greg Hagfors, chief executive officer of the Great Falls Clinic. "That was never our intent. We intend to grow and develop a community-based hospital serving a range of clinical needs."
But Benefis, which has 502 beds on two campuses in Great Falls, disagrees. In a complaint filed in Montana's 8th Judicial District Court in January, Benefis said the purchase "and its subsequent operation as a specialty hospital will violate (the law) and cause irreparable harm to Benefis by diverting the more profitable patient cases to Central Montana Surgical Hospital, leaving Benefis with the more costly, low-profit-margin cases." At that time, it also said the Great Falls Clinic and Essentia were trying to circumvent a licensing statute that requires facilities to reapply for licenses when there is a change in ownership.
Although a new license was granted Feb. 10, it has not been effective because of a temporary injunction that halted the hospital's sale, said Gayle Shirley, a spokeswoman for the state health department.
"The Department of Health and Human Services licensing application was slipshod," said Jim Goetz, an attorney for Benefis in Bozeman, Mont. "The plain fact is until the 2005 legislation, the department never distinguished between specialty hospitals and general hospitals, so they didn't have a formal procedure for determining the difference," he said. "They adapted on an ad hoc basis an application form that wasn't competent -- in my opinion -- that it was operating as a general hospital."
Roy Kemp, licensing bureau chief for the state health department, said Central Montana Hospital was granted the license because it submitted a narrative that satisfied the necessary requirements for a hospital, not a specialty hospital. Central Montana will provide surgical, physical therapy, pediatric and other services, but will not provide emergency room, obstetrics or psychiatric services. Kemp said those are not core requirements, and that all Montana hospitals are required to provide services to patients under the Emergency Medical Treatment and Active Labor Act.
For now, Central Montana is permitted to function as a general-services facility. Its six-month license is provisional, which means the health department's licensing bureau will conduct an unannounced visit within six months to determine if the hospital is operating as it said it would, Kemp said.