Hospital takeover sent to arbitration

Sisters of Charity seeking to buy 2 Exempla facilities

By Tillie Fong, Rocky Mountain News (Contact)

Published June 24, 2008 at 12:05 a.m.

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The cases involving the takeover of two Exempla hospitals by Sisters of the Charity of Leavenworth will go to arbitration, under a Denver District judge's ruling Monday.

"Plaintiffs argue that the repercussions from the transfer of ownership interest generate great public concern which should be addressed in a courtroom, not behind closed doors," wrote Judge Wiliam D. Robbins.

"It is recognized there are serious concerns; however, not only Colorado policy, but federal policy strongly favor arbitration."

At issue is whether the Sisters of Charity of Leavenworth Health System can take over Exempla Lutheran Medical Center in Wheat Ridge and Exempla Good Samaritan Medical Center in Lafayette.

The two hospitals are co-owned by Sisters of Charity and an Arvada nonprofit, the Community First Foundation. Community First wants to sell its 50 percent stake in the hospitals to Sisters of Charity for $311 million.

Sisters of Charity wants to proceed with $300 million in improvements to the two hospitals.

But the Exempla board and other groups are opposed to the sale because medical staff at both facilities would have to follow Catholic ethical and religious directives that ban abortions, vasectomies, tubal ligations and other forms of birth control, unless deemed medically necessary.

Last month the Sisters of Charity asked that a lawsuit it faces from Exempla be suspended and that the case go to arbitration instead.

Officials with Sisters of Charity and Community First Foundation could not be reached for comment Monday night.

Jeff Selberg, CEO and president of Exempla, said Monday night that he was disappointed but not surprised by the judge's ruling.

"It's important that everyone knows that we would continue to oppose this transaction and will oppose it in the arbitration process ordered by the judge," he said.

"While we're very supportive of Catholic health care at St. Joseph, we continue to believe that Lutheran and Good Samaritan remain nonsectarian, community hospitals. If the sponsors (Sister of Charity and Community First) want to go ahead with the transaction, it will not reflect the dual heritage of the two hospitals," he said.

Selberg said Exempla also plans to ask the arbitrator to open up the process.

"We think there was enough public interest to warrant a public process," he said. "Arbitration is a private process. We can petition the arbitrator for a public process."

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