State Approves Shannon Buyout of San Angelo Community Medical Center
SAN ANGELO, TX — Shannon Health will have State of Texas protection against anti-trust after it purchases the assets of its only competitor, San Angelo Community Medical Center. Texas Health and Human Services Commission spokeswoman Danielle Pestrikoff confirmed the Certificate of Public Advantage, or COPA, for Shannon was approved. Also, HHSC approved the COPA for Hendrick Health System in Abilene to buyout its only competitors, Abilene Regional Medical Center in Abilene, and Brownwood Medical Center in Brown County.
Community Health Systems based in Franklin, Tenn. announced the sale of its three west Texas hospitals in April. San Angelo Community Medical Center, a 171-bed facility, was sold to Shannon. CHS sold the 181-bed Brownwood Regional Medical Center and the 231-bed Abilene Regional Medical Center to Hendrick Health Systems in Abilene.
The sale of the three hospitals makes Shannon Health the monopoly hospital in Tom Green County and Hendrick the monopoly hospital in the Abilene region encompassing Taylor and Nolan counties. It also gives Hendrick the monopoly hospital in Brown County.
The COPA is not required for any of the hospital sales to take place but it does provide State-level protection for the purchasers from anti-trust lawsuits after the monopoly is established. State Rep. Drew Darby and Texas Senator Charles Perry pushed through law to provide the COPA, State anti-trust protection, and oversight last during the last legislative session. The law targets seven Texas counties where a COPA is available.
Darby said his objective with the legislation was to maintain access to healthcare in rural Texas where he said dozens of hospitals were closing due to unfavorable market conditions.
The COPA was due to be approved Friday. By Monday morning, no State agency had confirmed the approval until late Monday afternoon. Although Shannon CEO Shane Plymell told the local paper the deal was done late this morning.
The approval of the COPA comes after — and in spite of — the Federal Trade Commission's Sept. 11 70-page letter to Texas Attorney General Ken Paxton and HHSC Chief Deputy Commissioner Cecile Erwin Young arguing against it. In the letter, the FTC warned that Hendrick and Shannon would control more of the local healthcare economy in Abilene and San Angelo than the commission deemed desirable. The FTC asked the HHSC to deny the COPA.
Irving attorney Paul Craig Laird started a petition drive to request a public hearing on the COPA application for Shannon before it was approved. He said he submitted about 170 signatures from San Angelo residents requesting the hearing to no avail.
“The only thing that can stop this COPA is for the FTC to file a lawsuit and get an injunction,” Laird said. “No one else has the resources to fight something like this.”
Plymell said he was pleased with the outcome of the COPA acceptance, a process his team at Shannon had been working on for over a year.
“We are excited to receive final regulatory approval from the Texas Health and Human Services Commission. We are grateful for the work and support of our state leaders, our boards, associates and providers, and our community leaders throughout this process. Shannon looks forward to completing the acquisition process with Community in the coming weeks and working together to enhance care for the 300,000 people in our region,” Shannon Health CEO Shane Plymell said in a statement.
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