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AG Derek Schmidt: Charity care commitment clears way for sale of St. Francis hospital

Release Date: Oct 31, 2017

TOPEKA – (October 31, 2017) – The new owner of St. Francis Hospital in Topeka has agreed to enter into a binding agreement with the State of Kansas to maintain charitable health care and hear community input about its operations for at least the next three years, clearing the way for the sale of the hospital to close, Kansas Attorney General Derek Schmidt announced today.

On September 29, the parties presented to the attorney general’s office a proposed Asset Purchase Agreement wherein Topeka Health System, LLC, a Delaware for-profit entity, has agreed to purchase from the Sisters of Charity of Leavenworth Health System, Inc., a Kansas not-for-profit corporation, substantially all of the assets necessary for the operation of (1) the general acute care hospital known as St. Francis Health Center, Inc., Topeka, Kansas; (2) St. Francis Physician Clinics; (3) St. Francis Accountable Health Network, Inc.; and (4) an operating division of Med-Care of Kansas, Inc., doing business as Integrated Nuclear Enterprises.

Topeka Health System is a joint venture between the University of Kansas Hospital Authority and Ardent Health Partners, LLC. It previously announced the hospital will be known as The University of Kansas Health System, St. Francis Campus.

Under Kansas law, the attorney general is responsible for ensuring that the sale of charitable assets to a for-profit organization sufficiently complies with applicable Kansas laws that protect the public interest. The attorney general conducted an extensive review of the proposed sale, including retaining an outside expert to analyze the transaction. In this case, Schmidt said the difficult financial condition of the hospital and the likelihood they would close without the infusion of new capital by the new owners was compelling.

“Kansas will, of course, expect these new owners not only to live up to their commitments in this transaction but also to diligently comply with all aspects of Kansas law in their operations here,” Schmidt said.

Schmidt today sent a letter to the seller and the buyer of St. Francis informing them of the results of his review and advising them that “approval of this transaction is hereby given and should proceed forthwith…” A copy of the attorney general’s letter of approval and associated documents is available at www.ag.ks.gov/st-francis.

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