Prisma Health's plan to buy three hospitals from for-profit LifePoint Health is facing a legal challenge, the health system's CEO revealed Monday at the J.P. Morgan Healthcare Conference.
Prisma, South Carolina's largest health system, announced in early 2020 plans to acquire two hospital systems from Brentwood, Tenn.-based LifePoint: Camden, S.C.-based KershawHealth and Columbia, S.C.-based Providence Health, which together include three hospitals, a free-standing emergency department, and other facilities.
However, Prisma CEO Mark O'Halla said Monday that the deal is facing a legal challenge related to the health system's certificate of public advantage, a tool South Carolina leaders are using to regulate the merger that formed Prisma and provided federal antitrust immunity. O'Halla didn't share much detail, but said the legal challenge is currently before an appellate court. He said the health system has requested that its appeal go straight to the Supreme Court for a fast resolution.
"Those appeals will frankly decide if the transaction is going to close," he said.
South Carolina's health department updated Prisma's COPA in February 2020 to account for the addition of the KershawHealth and Providence Health assets. That prompted a legal challenge from Lexington Medical Center and others, who argued the COPA could not be amended. Instead, the complaint said a new COPA would have to be issued, Prisma spokesperson Sandy Dees wrote in an email.
West Columbia, S.C.-based Lexington Medical Center operates five hospitals serving Columbia, Lexington and the rest of the South Carolina Midlands area. Lexington County, S.C. is also among those challenging the deal. Scotty "Scott" Whetstone, chairman of the county council, wrote in an email Monday that the deal is not in the best interest of the people.
"This will create a monopoly which drives up cost and controls a market," he said. "This will force smaller hospital systems out of business that actually give superior service."
The South Carolina Administrative Law Court recently denied the health system's motions for summary judgment.
O'Halla said the deal is also being reviewed by the Federal Trade Commission. He said the agency asked for more information, which Prisma provided.
South Carolina Gov. Henry McMaster blessed the merger early on, saying it would provide "new opportunities to enhance clinical quality and improve access to affordable care."
Prisma was formed through the 2017 merger of Greenville Health System and Palmetto Health.