Calif. pols turn up heat on AG to block Daughters sale to Prime

State politicians have ramped up the pressure on California Attorney General Kamala Harris to block the sale of the Daughters of Charity Health System to for-profit Prime Healthcare Services.

In a letter released this week, the 18 California members of Congress cited “Prime's troubled past and regulatory problems and its incompatibility with the historic safety net mission of Daughters” in asking Harris to reject the deal.

They also pointed to government investigations into Prime's alleged overbilling schemes, as well as a number of charges from the National Labor Relations Board related to Prime's dealings with union employees.

Prime countered that the deal has the backing of other unions in the state, including the California Nurses Association and the SEIU local 121RN, Southern California's registered nurses union.

A Change.org petition, a link to which is hosted on Prime's corporate website, has more than 14,500 supporters out of 20,000 being sought.

The politically powerful Service Employees International Union-United Healthcare Workers West has been one of the chief critics of the deal and has taken its objections to the media and the airwaves.

Harris is currently in the midst of a 105-day review, which would bring the decision timetable into early February. That piece is expected to be the longest and most contentious of the approvals that Prime needs to close the $843 million deal, a price that includes the assumption of $449 million of Daughters' debt.

Daughters of Charity CEO Robert Issai, meanwhile, has reached out to what the system describes as “the small minority of California lawmakers” who oppose the deal.

In a letter earlier this month, he wrote that “the threat is real and it is immediate.”

If the Daughters' hospitals are forced to close, countless employees could lose their jobs and their pensions, hundreds of thousands of patients would be left without care, and those in need of emergency services could face life-threatening delays, Issai said.

Prime will inject $150 million in capital, preserve pensions, maintain charity-care levels and honor union contracts, Prime and Daughters of Charity have emphasized.

Daughters is working with financial adviser Houlihan Lokey on the transaction. Prime was chosen from a group of four finalists to purchase Daughters.

Follow Beth Kutscher on Twitter: @MHbkutscher