Colorado Department of Law issues opinion allowing sale of Colorado Plains Medical Center in Fort Morgan to proceed

April 29, 2022 (DENVER)—The Colorado Department of Law issued an opinion today allowing the sale of the Colorado Plains Medical Center in Fort Morgan from PHC-Fort Morgan, Inc. and Colorado Plains Physician Practices, LLC to Catholic Health Initiatives Colorado and Centura Health Corporation. PHC-Fort Morgan and Colorado Plains Physician Practices are for-profit entities and CHI-Colorado and Centura are nonprofit corporations.

“With increasing consolidation in the healthcare system and rising costs, we take our duty seriously under the Colorado Hospital Transfer Act to ensure that hospital sales and transactions will not result in material changes to the services the hospital provides to the community it serves. Our review found that the sale of Colorado Plains Medical Center will not cause any material change to CHI-Colorado or Centura’s charitable purposes, and CHI-Colorado will not make any material changes to the services the hospital provides to the Fort Morgan community,” Attorney General Phil Weiser said.

The Colorado Department of Law conducted its review as required under the Colorado Hospital Transfer Act, § 6-19-101, C.R.S, and under the attorney general’s common law authority over charitable assets.  While the Colorado Hospital Transfer Act does require the Department’s review of this sale, it does not direct the nature of the Department’s review when a for-profit hospital is selling its assets to a nonprofit, as is the case here. The Department therefore reviewed the sale under the Attorney General’s common law powers, as authorized by the Act.

The factors considered by the Department in conducting its review were:

  • Whether the sale would cause any material change to CHI-Colorado’s charitable purpose;
  • Whether the sale would terminate the Attorney General’s jurisdiction over the hospital’s assets;
  • Whether the sale would serve the public interest, taking into account the impacts the sale could have on the Fort Morgan community;
  • Whether CHI-Colorado acted reasonably in entering the sale agreement; and
  • Whether there was any evidence of any improper conduct on behalf of the parties to the sale.

Based on documents and other information provided by CHI-Colorado, the Department decided that the sale satisfied all those factors. The hospital’s sale will not cause any material change to CHI-Colorado or Centura’s charitable purposes and will not terminate the Attorney General’s jurisdiction over CHI-Colorado, Centura, or the hospital. The Department also found that the sale was in the public interest because CHI-Colorado will not be making any material changes to the services the hospital provides to the Fort Morgan community. Additionally, the Department found that CHI-Colorado was reasonable in entering the sale and there was no evidence of improper conduct by any of the parties to the sale.

There will not be any material layoffs, downsizing, consolidation, or other changes to the hospital’s operations according to the transaction agreement.

The transaction is expected to close on or around May 1 and Centura Health Corporation, an affiliate of CHI-Colorado, will operate the hospital going forward.

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Lawrence Pacheco
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