DENVER—The state attorney general’s office is reviewing plans by Denver’s third-largest hospital system to buy control of two area hospitals, even though a court-appointed arbitrator rejected a similar deal in 2009.
The Catholic Sisters of Charity of Leavenworth Health System is seeking control of Exempla Lutheran Medical Center and Exempla Good Samaritan Medical Center. Community First Foundation would gain $280 million in the transfer.
Exempla was formed in 1998 by the Sisters of Charity and Community First Foundation. Sisters of Charity controls Denver’s Exempla St. Joseph Hospital, as well as hospitals in other states.
In 2009, an arbitrator blocked the sale of the two Denver-area nonsectarian hospitals to Sisters of Charity, a health system that follows Roman Catholic church guidelines that ban emergency contraception and other procedures the hospitals offer. The decision apparently had little to do with differing values but with state laws governing nonprofit organizations like Exempla.
At the time, the foundation had proposed selling its membership stake in the nonsectarian Exempla Lutheran Hospital in Wheat Ridge and Exempla Good Samaritan Medical Center in Lafayette to Sisters of Charity for $311 million. Both hospitals offer services like emergency contraception that would have ended if they were controlled by the Catholic system.
Objections filed this summer and fall with the state attorney general office claim Community First Foundation and Sisters of Charity are trying to accomplish a similar deal. Opponents include former chairs of Exempla’s governing body and Exempla Lutheran physicians.
In a letter to the attorney general, Sisters of Charity and the foundation said that they have agreed to transfer Community First’s interest in Exempla for $280 million by June 2014. They said they plan to seek state review of the transaction.
Community First Foundation said it used to oppose running all three hospitals by Catholic principles but that Exempla’s system now must borrow money for expansion. Sisters of Charity needs to consolidate control to attract bond buyers and spreading Catholic directives to all three hospitals is part of that control, the filings said.
The Catholic Sisters of Charity is Denver’s third-largest hospital system, after HCA-HealthOne and Centura Health.
