WASHINGTON – Sen. Chuck Grassley (R-Iowa), a fierce advocate of rural healthcare, wrote to four private companies with investments in the Ottumwa Regional Health Center in Ottumwa, Iowa, following the egregious assault of nine female patients by a now deceased nurse practitioner at the hospital.
In January, the Ottumwa Police Department released a report concerning the overdose death of 27-year-old Devin Michael Carracio, of Centerville who was found dead inside an office at ORHC on October 15, 2022.
While investigating Caraccio’s death, police were able to access his cellphone, and while reviewing the contents of the phone, police identified evidence that Caraccio had sexually assaulted more than one patient, while he was working in the hospital. Caraccio photographed or recorded images of the assaults that were later discovered by police.
A letter dated March 17 was sent to the following recipients:
Mr. Edward K. Aldag, Jr., Chairman, President and Chief Executive Officer Medical Properties Trust; Mr. Charles R. Kaye, Chairman and Chief Executive Officer Warburg Pincus; Mr. David M. Dill, Chairman and Chief Executive Officer LifePoint Health; Mr. Marc Rowan, Chief Executive Officer Apollo Global Management, LLC; and Mr. Eric Carlson, Chair Ottumwa Regional Health Center Board of Trustees.
In the letter, Grassley asks each company for a review of their financial transactions related to Ottumwa Regional, which has been part of a series of opaque and questionable acquisitions, mergers and other related-party transactions at the direction of these companies.
“The constant selling and reselling of hospital assets by private equity, private capital, real estate investment trusts (REITs), and other related entities raises questions with respect to whether these financial maneuvers have negatively impacted the resources and thereby the care our nation’s rural hospitals provide to their patients,” Grassley wrote.
“When I see the type of tragic lapses that occurred at Ottumwa Regional…it raises serious questions with respect to whether these hospitals have the right resources or if they are being loaded with overwhelming amounts of debt to the point where they are forced to shift money away from patient care,” Grassley continued. “When multiple financial transactions involving the same hospital systems occur, patients can get lost in the equation.”
In 2010, ORHC was sold to RegionalCare Hospital Partners, that was owned by Warburg Pincus. In November 2015, Apollo Global Management acquired RegionalCare, Ottumwa’s parent company, from Warburg in a deal valued at $800 million, which formed RCCH Healthcare Partners.
In 2016, Apollo bought out Capella Healthcare from Medical Properties Trust (MPT) and merged it with RCCH Healthcare for a combined company worth $1.7 billion. Then, in 2018, Apollo purchased LifePoint Health for $5.6 billion and merged it with RCCH, branding the merged entity as LifePoint Health.
Grassley said a transaction of particular concern took place in 2019, where MPT reentered the picture and acquired the real estate of 10 LifePoint Hospitals for $700 million in what is known as a sale-leaseback transaction, in what he described as a “ponzi finance” dumping losses onto patients, communities, investors and taxpayers.
Grassley’s letter details that Ottumwa Regional was one of the 10 hospitals included in this sale-leaseback, which saddled the hospital with debt. Public reports from that period valued the Ottumwa facility deal at more than $57 million.
In 2021, Apollo resold LifePoint Health back to itself – resulting in a $1.6 billion gain. At the same time, LifePoint received an almost identical amount, $1.64 billion in COVID stimulus aid, including almost $650 million in grants that the company will not have to pay back.
Grassley is seeking additional information with respect to Ottumwa Regional Health Center’s financial stability and to what extent the related-party transactions contributed to the sexual assault incidents at the hospital.
