Tenet Reaches Deal to Sell Redding Hospital
Tenet Healthcare Corp. said Friday that it had agreed to sell the Redding Medical Center to a private company whose partners include a group of local doctors.
The Santa Barbara-based company put the Redding hospital up for sale last year after doctors were accused of performing hundreds of allegedly unnecessary heart surgeries at the facility.
Hospital Partners of America Inc., a privately held Charlotte, N.C., company, has agreed to pay $60 million for the hospital under a deal set to close by June 30, Tenet said.
HPA plans to operate the hospital in partnership with a local group of physicians. Tenet had no details on the physicians.
HPA Chief Executive Todd Johnson could not be reached for comment.
Last year, Tenet paid $54 million to resolve a federal investigation into the company’s role in the scandal. Tenet, the nation’s second-largest hospital chain, also is trying to settle lawsuits filed by hundreds of patients over operations performed at Redding.
Tenet’s sale of the 246-bed hospital was aimed at preserving its eligibility for Medicare, Medicaid and other government health programs. Federal regulators had begun proceedings to exclude Redding from the lucrative programs, a financial death knell for a hospital.
When Tenet agreed to sell the Redding hospital, the proceedings were suspended and regulators indicated that a new owner’s participation in the programs would not be in jeopardy.
“It was Tenet’s decision to sell [Redding Medical Center] and one that the company made reluctantly,” Tenet spokesman Steven Campanini said.
“Faced with the real possibility that Medicare exclusion could happen, Tenet had to do the right thing for its employees, the patients, physicians and the community of Redding,” he said.
The Redding facility has about 1,000 workers. HPA agreed to continue the employment of those on staff.
Proceeds from the sale will be held by a Tenet subsidiary, which also will retain any legal liabilities arising before the sale, the company said.
