ST. PETERSBURG — Bayfront Medical Center, the last independent hospital in Pinellas County, has agreed to a sales price of $202 million, its prospective buyer Health Management Associates said Thursday.
Of that, Health Management Associates is spending $162 million for an 80 percent share of the hospital. A newly formed local nonprofit foundation will own the remaining 20 percent interest in the joint venture that operates the hospital and other subsidiaries of the system.
The announcement came hours after the St. Petersburg City Council asked pointed questions about the deal in a meeting they insisted be televised at the last minute. The council gets to vote on the deal because Bayfront sits on city-owned land.
Numerous questions centered on how Bayfront's legacy of charity care could be affected by the deal. Hospital and city leaders have pledged to maintain Bayfront's existing policies, included in a 50-year lease city council members may vote on next Thursday.
Some council members voiced concerns about tracking Bayfront's charity care. The policy has no quotas; it simply explains that patients can qualify for charity care if their incomes are less than 200 percent of the federal poverty level and they don't get other government assistance.
In describing its service to the poor, HMA in the past has combined charity care with services provided under Medicaid, the government's insurance for low-income women and children. That's not an unusual practice, but some experts say Medicaid shouldn't be lumped in with charity care, because although hospitals say reimbursements are low, they do receive funds through the program.
"I don't want it diluted with Medicaid," council member Wengay Newton said of the charity statistics.
According to state reports, 5.7 percent of Bayfront's charges in 2011 met the state definition of charity care, more than was reported at most HMA hospitals. Bayfront's combined charity and Medicaid figure was nearly 30 percent.
Bayfront officials agreed to provide measurements by which the city could monitor charity care. But they did not specify which figures would be used.
Council members also sought assurances that HMA will make good on promises to invest an additional $100 million in Bayfront over the next five years. Hospital and company officials say the issue is covered in their private agreements.
HMA senior vice president Alan Levine cited the company's investment in Bayfront as proof of its commitment.
Bayfront is slated to become a regional hub for six smaller HMA hospitals, including Dade City's Pasco Regional Medical Center and the Brooksville-Spring Hill regional hospitals.
"Bayfront is going to be a regional brand throughout the west coast of Florida," Levine said.
HMA has not yet decided how the Bayfront name will be used at the other hospitals, he said. The proposed city lease requires "Bayfront" to remain in the name of the St. Petersburg hospital, which may not include references to any location but the city. So the company can't put Tampa Bay in the name.
City officials and hospital leaders agreed to appoint a liaison to meet regularly to discuss hospital developments. But they took pains to insist the person would be a city employee, not an elected official. That means any meetings would not be open to the public, under state law.
Some members said they were worried about a requirement that Bayfront "use reasonable efforts" to maintain its designation as a trauma center, the only one in Pinellas.
Council member Jim Kennedy noted the language could provide a way to drop an expensive service.
HMA's Levine, speaking later Thursday, said that the company is committed to continuing trauma services at Bayfront.
The lease is scheduled to come before the City Council for a final vote at 4 p.m. on Feb. 21. Mayor Bill Foster and some council members have publicly supported the deal. While others have been more reluctant, the Bayfront sale appears to be moving forward.
Letitia Stein can be reached at [email protected] or (727) 893-8330.
This story has been updated to reflect the following corrections:
Bayfront Health System's full purchase price is $202 million. Of that, Health Management Associates is spending $162 million for an 80 percent share of the hospital. A newly formed local nonprofit foundation will own the remaining 20 percent interest in the joint venture that operates the hospital and other subsidiaries of the system. Also, it is not unusual for some hospitals to consider uncompensated costs of care for Medicaid patients as part of their charity service.