California greenlights CHI-Dignity merger, with charity care conditions

The California Justice Department gave its conditional approval Nov. 21 to the union of Dignity Health and Catholic Health Initiatives, marking an important—but not final—step toward finalizing the merger.

The department’s green light follows a rigorous review process that will result in new charity and indigent care requirements. The combined entity, which will be called CommonSpirit Health, has already received approval from the Federal Trade Commission and the Catholic Church, and is on track to close by Dec. 31, creating a not-for-profit health system with 140 hospitals and more than 700 care sites across 21 states, including 30 hospitals in California.

CommonSpirit Health must maintain emergency services and women’s healthcare services for 10 years after the deal closes, under California’s conditions.

The conditions also require Dignity, CHI and CommonSpirit to create a socalled Homeless Health Initiative in California to support hospitalized individuals experiencing homelessness and co-locate, coordinate and integrate medical, behavioral health, safety and wellness services with housing and other social services across the 30 areas served by Dignity hospitals in California. The organizations will need to allocate $20 million over six fiscal years to implement the program in partnership with local governments and not-forprofit organizations.

Beginning in 2019, all of the former Dignity hospitals in California that are part of CommonSpirit will be required to offer a 100% discount to patients earning up to 250% of the federal poverty level.

Dignity hospitals will also need to engage with affiliated organizations, community clinics, healthcare providers, houses of worship and other community-based organizations on the availability of financial assistance at each California hospital.