$78M Trios hospital sale is delayed. Here’s why — and for how long

The long-awaited $78 million sale of Trios Health has been delayed a day or two.

Closing was expected to happen Tuesday night, but it’s now been pushed back to Wednesday or Thursday, said Jeff Atwood, spokesman for RCCH HealthCare Partners, the company that’s buying the public hospital system.

And it’s none too soon. Documents obtained by the Herald about the sale show Trios Health at one point expected to run out of money this week.

Though there’s a brief delay, Trios will keep operating as usual in the meantime and the district’s 1,100 employees will continue getting paid, Atwood said.

The delay is “a dotting the I’s and crossing the T’s thing,” he said, noting it has to do with the intricacies of the deal.

“Any time there’s a transaction this complex, there are a thousand different agreements and documents and schedules that have to be done,” he said. “We’re going through the final bit of minutiae and getting to the point where you have a clean and final document.”

While the deal has been in the works for months, state approval through the Certificate of Need program just came on Friday afternoon. Certificate of Need is a regulatory process required for certain health care transactions.

Trios submitted its Certificate of Need application toward the end of June, shortly after a federal judge approved the hospital system’s plan to emerge from Chapter 9 bankruptcy protection. The plan hinged on the sale.

In its application, Trios said its finances were in crisis and it could run out of money to keep operating by the end of July.

The state agreed to expedite its review.

Kadlec Regional Medical Center in Richland raised concerns, including about a lack of meaningful public input with the sped-up review timeline, but state officials said the case met the emergency threshold.

The state approval came with some conditions, including that Trios continue to participate in Medicare and Medicaid programs “at a rate that is consistent with the payer mix in the Benton and Franklin county planning area,” provide charity care “in compliance with its charity care policies reviewed and approved by (the state),” and continue to provide “essential services” such as 24-hour emergency care, critical care, perinatal/obstetrics, pediatrics and inpatient/outpatient surgery, for at least 10 years.

Trios Health dates back to 1948 and used to be known as Kennewick General Hospital.

It’s struggled financially in recent years, filing for bankruptcy in June 2017.

RCCH HealthCare Partners and UW Medicine emerged as saviors. They’ve formed a public-private partnership to own and run community hospitals in Washington and beyond, with RCCH handling management and UW offering clinical expertise.

RCCH and UW are owners of the limited liability company that’s buying Trios, state documents said.

RCCH is a private health care company based in Tennessee. It has 16 regional health systems in 12 states.

UW Medicine in Seattle includes four hospitals and a network of clinics and services.

Trios Health is the name of the Kennewick Public Hospital District’s care system.

The sale covers the district’s operations and assets, including its two hospital campuses — in downtown Kennewick and Southridge— plus several clinics.

It also covers the district’s stake in Tri-Cities Cancer Center and High Desert Surgery Center.