Attorney General Bonta Conditionally Approves Sale of Beverly Community Hospital in Los Angeles County

OAKLAND — California Attorney General Rob Bonta today announced his conditional approval of the sale of Beverly Community Hospital to nonprofit American Healthcare Systems (AHS). Beverly provides critical medical services, including low-cost Medicare and Medi-Cal services, to the community of Montebello in Los Angeles County. Earlier this year, the hospital filed for bankruptcy, which led to a disruption in services such as pediatric care, gynecology, maternity services, and wound care. To help restore these essential services for patients, the California Department of Justice (DOJ) has for weeks worked actively with AHS and Beverly to put together a successful sale agreement with strong conditions that AHS has committed to fulfilling. Those conditions, which will safeguard access to high-quality, affordable healthcare for the Montebello community, including for its most vulnerable residents, were approved by a bankruptcy court last night.

“I take my responsibility to protect the lives, health, and safety of Californians seriously,” said Attorney General Bonta. “Montebello’s people deserve access to high-quality, affordable healthcare services, and today, we are ensuring they can continue to rely on Beverly for those services. I am grateful to Beverly's hardworking board, and to AHS and all other parties involved, for working cooperatively with my office on this potential sale. By consistently communicating and engaging with us in good faith, they helped craft conditions that will protect the welfare of the Montebello community as well as the staff and caregivers at the hospital. The DOJ will continue fighting for healthcare access and equity for all Californians, and we call on future partners in other nonprofit hospital transactions to stand side by side with us in this fight.”

Under California law, the Attorney General has a statutory duty to review all non-profit healthcare facility transactions, including those that go through bankruptcy court. In his review of the potential sale of Beverly, Attorney General Bonta’s top priority was to ensure the needs of the Montebello community continue to be met. During the review process, Beverly, AHS, and other potential buyers worked in good faith with DOJ to achieve this goal.
 
Under the Attorney General's conditions, approved by the bankruptcy court, AHS has committed to:

• Using commercially reasonable efforts to maintain all of Beverly’s current services, including an emergency room, accompanying medical surgical unit, cardiology, diagnostic imaging, laboratory services, and intensive care unit.
• Ensuring continued access to Medi-Cal and Medicare for eligible patients. Over 75% of the patients served by Beverly are Medicare or Medi-Cal beneficiaries.
• Using commercially reasonable efforts to reinstate services closed during bankruptcy including, obstetrics, gynecological, and maternity services, pediatrics, breast center, and wound and hyperbaric care.
• Providing charity care and a notice of financial assistance policy.
• Providing language access and deaf and hearing-impaired interpreter services.
• Maintaining a Community Board, including to comment on compliance with conditions in the Annual Report to the Attorney General.
• Maintaining medical staff in good standing and ensuring compliance with state staffing levels.

A copy of the Attorney General's conditional approval can be found here.

DOJ’s Healthcare Rights and Access Section (HRA) works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. HRA’s attorneys monitor and contribute to various areas of the Attorney General’s healthcare work, including nonprofit healthcare transactions; consumer rights; anticompetitive consolidation in the healthcare market; anticompetitive drug pricing; privacy issues; civil rights, such as reproductive rights and LGBTQ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products.