Ascension selling 9 Illinois hospitals to California-based Prime Healthcare

Ascension is selling nine of its Illinois hospitals — more than half of its hospitals in the state — to a large, California-based health system, it announced Thursday.

Ascension plans to sell the hospitals, along with four of its post-acute and senior living facilities, to Prime Healthcare. Neither Prime nor Ascension disclosed the sale price Thursday.

The hospitals slated to be sold to Prime include: Ascension Holy Family in Des Plaines, Ascension Mercy in Aurora, Ascension Resurrection in Chicago, Ascension St. Francis in Evanston, Ascension St. Joseph in Joliet, Ascension St. Joseph in Elgin, Ascension St. Mary in Kankakee, Ascension St. Mary in Chicago and Ascension St. Elizabeth in Chicago. Other facilities involved in the sale include Fox Knoll Village in Aurora, Villa Franciscan Place in Joliet, Heritage Village and Heritage Lodge in Kankakee, and Resurrection Place in Park Ridge, all now operated by Ascension Living.

The sale will ensure “that the greater Chicago area has sustainable, quality health care access long into the future,” said Polly Davenport, president and CEO of Ascension Illinois, in a news release.

Prime has 44 hospitals and more than 300 outpatient locations in 14 states, and has a mission “to save and improve hospitals so that they can deliver compassionate, quality care to patients and better health care for communities.” The Ascension hospitals would be Prime’s first hospitals in Illinois.

Unlike Ascension, which is a not-for-profit Catholic health system, Prime includes the for-profit Prime Healthcare Services and an affiliated charity called the Prime Healthcare Foundation, under which 14 of Prime’s hospitals operate.

Under the deal, eight of the Ascension hospitals would become for-profit, while St. Francis in Evanston would retain its not-for-profit status as part of the Prime Healthcare Foundation, said Prime spokesman Elizabeth Nikels in an email.

When asked whether Prime plans to keep all of the Illinois hospitals open, Nikels wrote, “Prime is committed to the long-term success and service of every hospital that is part of our system and has never closed a hospital.”

“Prime has improved the quality of care in every hospital that joins the system and invests significant resources in technology, infrastructure and systems improvement,” Nikels wrote. “Prime will maintain all hospitals and facilities at closing of the transaction and continue their service to their communities.”

Prime has already pledged to invest $250 million in the facilities for upgrades, capital improvements, technology and system upgrades, as part of the deal.

Prime plans to hire all hospital and care facility staff, though workers will be asked to reapply for their jobs through “a streamlined, online application system,” Nikels said. Workers will receive more information about the application process as the acquisition date approaches, she said.

The hospitals will keep their current names, minus the “Ascension” branding, Nikels said.

The Ascension Illinois hospitals would no longer be Catholic hospitals once they’re acquired by Prime, though Prime and Ascension have been working with the Archdiocese of Chicago to determine if there are Catholic traditions the hospitals can carry on.

The deal must gain approval from the Archdiocese of Chicago and the Illinois Health Facilities and Services Review Board in order for the sale to move forward. The sale is expected to close in the first quarter of 2025, pending approvals.

Hospital mergers and acquisitions are common in the Chicago area, which has several large health systems that compete for patients. But if the Ascension sale is approved, it will be the third ownership shift for those hospitals in a decade – a lot of change, even by Chicago-area standards.

The hospitals now for sale were once part of Presence Health, and then, in 2018, became part of Amita Health . In 2022, Ascension and AdventHealth unwound their Amita Health partnership , and the hospitals were then Ascension Illinois hospitals.

Ascension, which has 140 hospitals across the country, will hold on to five Illinois hospitals. It will keep Ascension Alexian Brothers in Elk Grove Village, Ascension Alexian Brothers Behavioral Health Hospital in Hoffman Estates, Ascension Alexian Brothers Rehabilitation Hospital in Elk Grove Village, Ascension St. Alexius in Hoffman Estates and Ascension St. Alexius Women and Children’s in Hoffman Estates.

Prime was founded in 2001 by Dr. Prem Reddy, who still serves as chairman and CEO of the company, with a mission “to save hospitals, improve community health care and provide the very best care to patients,” according to Prime’s website.

The company has, however, tangled with the federal government on multiple occasions. Prime and Reddy agreed in 2018 to pay the government $65 million to settle allegations that 14 Prime hospitals in California knowingly submitted false claims to Medicare by admitting patients to hospitals who didn’t need inpatient care, and by billing Medicare for more expensive diagnoses than what the patients actually had. In 2021, Prime, Reddy and one of Prime’s doctors agreed to pay $37.5 million to settle allegations that Prime paid the doctor kickbacks for patient referrals, among other allegations. Prime did not admit any liability as part of those settlement agreements.

“Prime has successfully concluded a five-year corporate integrity agreement, not only meeting but exceeding industry standards,” Prime said in a statement.