California AG OK's Adventist's Rideout Acquisition

With state approval, the nonprofit system can close the most significant deal it has pending in the northern part of the state.

Rideout Regional Medical Center, a 219-bed acute care hospital in Marysville, California, will soon become part of Adventist Health, a nonprofit system that serves patients in three states.

The California Attorney General’s Office approved the transition of the medical center and a number of other Rideout Health assets throughout Yuba and Sutter counties, which are north of Sacramento, Adventist announced Tuesday.

“We are confident that the partnership will have a positive impact on patients and the broader Yuba-Sutter community,” Adventist CEO Scott Reiner said in a statement.

Q&A: Adventist CFO Expects Cost-Cutting, Expansion

The arrangement, which the organizations announced last October with the signing of an affiliation agreement, is expected to close officially on April 1. In addition to the medical center, other Rideout Health assets will be transferred to Adventist, including a heart center, cancer center, outpatient clinics, and other ancillary services.

Adventist CFO Joe Reppert, CPA, MBA, who was promoted into his current position last month, told HealthLeaders Media in January that the Rideout acquisition was the most significant deal Adventist, which is based in Roseville, California, had pending in the northern part of the state.

“The addition of Rideout Health will enable more effective coordination of certain services and specialty care among our hospitals in that geography,” Reppert said. “That circles right back to better care for our patients. As a result of this new affiliation, other partnerships are developing for further expansion of services, locations, and covered lives.”

Janice Nall, chair of Rideout’s board of directors, said her organization is pleased to have the attorney general’s approval and that the deal will ultimately benefit Rideout patients.

“Adventist Health’s philosophy of health and wellness will bring important prevention programs to our region," Nall said in the statement.

The attorney general’s approval, however, comes with strings attached.

Both organizations have agreed to a number of legally binding conditions. For example, the hospital must continue to operate as a licensed general acute care hospital with 24-hour emergency and trauma medical services for 10 years.

Additionally, the hospital must provide cardiac, neonatal, obstetric, women’s health, and certain other services for five years. And it must provide at least $2,826,391 annually in charity care—which the attorney general’s conditions define as the actual cost of care, not the price.

More than 2,100 people are employed by Rideout, including about 300 physicians on staff. As previously reported, none of them are expected to be displaced.