California Attorney General Rob Bonta has conditionally approved the proposed affiliations of Chapters Health System, Inc., a Florida-based nonprofit hospice provider, with two California hospice organizations. The decision marks the first time the Attorney General’s Office has reviewed transactions involving nonprofit hospice providers in the state, as most hospices are operated by for-profit entities.
Chapters Health System, Inc. plans to expand its operations from the East Coast into California, Nevada, and Oregon through a new nonprofit network called “Chapters West Region.” In California, it seeks to affiliate with East Bay Integrated Care, Inc. (doing business as Hospice East Bay) and Hospice of Santa Cruz County. Both have provided hospice and palliative care in their communities for over 40 years.
Under state law, any transaction involving the transfer of control or governance of a nonprofit health facility requires approval from the Attorney General’s Office. According to today’s announcement, Chapters Health System would become the sole corporate member of both Hospice East Bay and Hospice of Santa Cruz County. However, no sale or transfer of assets is planned; both organizations will keep separate governing bodies and retain their nonprofit status along with control over their assets and fundraising.
Attorney General Bonta stated: “The hospice industry has increasingly attracted scrutiny, in part because of the potential for fraud and abuse. Earlier this month, I launched a new initiative aimed at addressing that very problem, and now, I am announcing that my office is, for the first time, conditionally approving transactions involving nonprofit hospice care providers. The conditions we have developed are the result of a thorough review and serve the public interest by ensuring continued access to services for terminally ill patients and their loved ones. At the California Department of Justice, we remain committed to prioritizing oversight of the hospice industry.”
The conditional approval comes with several requirements set for five years to ensure continued operation and quality care at both hospices. These include maintaining continuous licensure as hospices; retaining staff in good standing; providing adequate staffing levels; implementing effective patient triage systems; establishing quality advisory committees at each organization; continuing specialty services such as veteran programs and children’s grief support; submitting annual compliance reports; and allowing enforcement actions by the Attorney General if needed.
The Healthcare Rights and Access Section (HRA) within the California Department of Justice oversees issues related to healthcare affordability, accessibility, quality, consumer rights protections in healthcare transactions like these affiliations.
A copy of the conditional approval letter can be found here.
