State approves $74.8 million hospital sale

MISSOULA (AP) — Attorney General Tim Fox has approved the sale of Community Medical Center in Missoula to a joint business venture between Billings Clinic and a Tennessee company.

Fox said Monday that his Office of Consumer Protection still must sign off on the way $74.8 million received from the sale will be distributed. 

Because Community Medical Center is a nonprofit, the proceeds from its sale to a for-profit group must go to a foundation with a health-focused mission that serves the same area as the hospital.

The hospital’s board of directors submitted its proposal for distribution last month and Fox’s office asked for additional time to review the plan. It includes $10.5 million in gifts to the University of Montana Foundation to help start three health care-related programs at the school and help fund health care programs and infrastructure at the two-year Missoula College, which is under construction.

The rest of the money would flow to the Community Hospital Legacy Foundation, which would invest the cash and spend the earnings. It will be governed by a volunteer board.

The parties have agreed to a Feb. 27 deadline to approve or revise the planned distribution.

Billings Clinic and RegionalCare Hospital Partners initially agreed to a $67.4 million price for the hospital’s assets in September, but an outside appraisal raised that amount.

The sale agreement requires the new owners to maintain essential services, continue to provide charity care and make investments in equipment and in recruiting health care providers.

The agreement gives three years of severance pay to Community Medical Center CEO Steve Carlson and requires he be available for consultation during those three years to ensure a smooth transition.

The sale is expected to close on Friday.