Colorado Attorney General John Suthers has declined to intervene in a transaction that will put the day-to-day management of two secular Denver-area hospitals under the guidance of Catholic ethical and religious directives.
Staying out of it
Colo. attorney general won't probe Exempla deal
The Nov. 5 decision from Suthers was made public last week and all but clears the way for Exempla Healthcare, Denver—which owns two hospitals and contract-manages another—to come under the control of the Sisters of Charity of Leavenworth, Lenexa, Kan. That includes two suburban Exempla hospitals that in the past were run under nonreligious management: 395-bed Exempla Lutheran Medical Center, Wheat Ridge; and 182-bed Exempla Good Samaritan Medical Center, Lafayette.
Community activists have protested the ownership changes because they would prevent the hospitals from performing services considered “intrinsically evil” under Catholic ethics, including vasectomies, tubal ligations, abortions and certain end-of-life practices.
The Sisters of Charity of Leavenworth has been under pressure from Catholic leaders to gain more operational control over Exempla before making capital investments in the system, like building a new hospital on land next to the existing 361-bed Exempla St. Joseph in downtown Denver, and making capital upgrades to all three existing hospitals.
Exempla St. Joseph has been run under Catholic ethics for more than a century, while Exempla Lutheran and Exempla Good Samaritan have always been run secularly. The three hospitals are run under a 12-year-old joint operating agreement between its co-sponsors, the Sisters of Charity of Leavenworth and the secular Community First Foundation.
The Sisters of Charity attempted several years ago to buy out the secular foundation for $311 million, but an arbitrator last spring blocked the transfer, ruling that the foundation’s assets belonged to the local community and could not be sold. But the arbitrator would allow the Catholic organization to take over the system if no monetary sum was included.
However, under threat of litigation, the Sisters of Charity and Community First Foundation decided to abandon an asset transfer and make structural changes to Exempla’s bylaws to give the Catholic system the level of control it needed in order to make capital investments, including the application of religious ethics at the formerly secular hospitals.
The changes were then submitted for Suthers’ approval. The attorney general opined that a 2008 state law designed to give his office greater authority over hospital ownership transfers did not apply to Exempla because the changes were being made through bylaws, and not a transfer of assets or control. The changes, which are still pending approval from the Federal Trade Commission, are expected to be completed by the end of the year.
Community activists expressed disappointment over Suthers’ decision, while the Sisters of Charity said through a spokeswoman that the decision spoke for itself and planning for the new Denver hospital would begin as soon as the changes receive final approval.
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