The California attorney generals office has rejected the proposed sale of Anaheim (Calif.) Memorial Medical Center to Pacific Health Corp., Tustin, Calif., for $57 million.
In a letter to the 223-bed hospitals parent, not-for-profit Memorial Health Services, Fountain Valley, Calif., Chief Deputy Attorney General James Humes wrote that the civil action filed against Pacific and some of its former executives last week played a role in the decision. The Los Angeles city attorney filed a lawsuit accusing three hospitalsincluding two owned by Pacificof participating in a scheme to bill government healthcare programs for bogus illnesses. Those Pacific hospitals were also among three hospitals raided by federal agents last week in a federal criminal fraud investigation. Pacific Health has maintained that neither the company nor its hospitals are targets of that investigation. Nevertheless, Humes also cited that investigation in his letter, along with his offices investigation, consultants reports, public comments and potential alternate bidders.
The attorney general now has rejected two proposed sales of the hospital to for-profit companies. In July 2007, the attorney generals office rejected a proposed sale to Prime Healthcare Services, Victorville, Calif. A third proposed sale of the hospital was scuttled when the buyer, for-profit Integrated Healthcare Holdings, Santa Ana, Calif., could not complete financing of the deal. Memorial Health Services announced that it would seek a buyer or capital partner for the hospital in July 2006. -- by Vince Galloro