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State investigation stalls sale of south St. Louis’ St. Alexius Hospital

State investigation stalls sale of south St. Louis’ St. Alexius Hospital

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ST. LOUIS — A state investigation into complaints about patient care at the city’s St. Alexius Hospital has stalled the sale of the facility, according to court records.

The 190-bed hospital in south St. Louis has struggled financially for years, and serves a large percentage of patients who are uninsured, and who rely on Medicare or Medicaid. Employees and administrators have hoped that a new operator could bring change, and revitalization.

St. Alexius and its owner, hospital management company Americore Holdings, have been in bankruptcy proceedings since December 2019. When a bankruptcy court judge approved a proposal for Americore to sell the hospital in July, the deal was expected to close no later than Aug. 21.

But a status report filed earlier this month by the hospital’s bankruptcy trustee Carol Fox said state and federal agencies had received complaints recently about St. Alexius. The documents say the proposed buyer was still interested in purchasing the hospital, but didn’t want to close until after the state investigation was resolved.

The state received an anonymous complaint related to the quality of care at the hospital, the court documents say. The state then sent “surveyors” to the hospital over the course of 10 days in August, resulting in two tags of “immediate patient jeopardy,” a situation in which a patient suffers serious harm, or could suffer serious harm.

The hospital had to submit plans to correct those problems, according to the court records.

The Missouri Department of Health and Senior Services confirmed on Thursday that the investigation was ongoing. “We have an active investigation there that we cannot comment on due to it not being completed,” Lisa Cox, department spokeswoman, said in an email.

Fox said in her Sept. 2 status report that the hospital’s buyer knew about the investigation and wouldn’t close while it was continuing.

Her report also says the hospital received an inquiry from the U.S. Attorney for the Eastern District of Missouri about use of money it received under the Coronavirus Aid, Relief and Economic Security Act.

Fox, a principal at the financial consultant GlassRatner Advisory and Capital Group, said in an email on Thursday that the issue with the U.S. Attorney had been resolved, but she wouldn’t say more about the complaints or the expected timeline for the sale.

St. Alexius has been sold multiple times in the past decade, and the two most recent owners both filed for bankruptcy. The hospital had negative profit margins in 2015, 2016 and 2017, according to the St. Louis Area Business Health Coalition.

Founded in 1869 by the Catholic order of Alexian Brothers, today St. Alexius has a main hospital and senior care center at 3933 South Broadway. The hospital also has the Lutheran School of Nursing, located near the intersection of Miami Street and Jefferson Avenue.

In January 2019, a bankruptcy court authorized the previous owner, Florida-based Promise Healthcare Group, to sell its ownership stake to Americore Holdings. Americore owned St. Alexius for less than a year before it also filed for bankruptcy, in December 2019.

Then, in late July, a judge in Americore’s bankruptcy case said he would grant a motion to sell the hospital to SA Hospital Acquisition Group, a group of businessmen with backgrounds in nursing homes, health systems and investment banking.

The buyer group, SA Hospital Acquisition Group, includes members Lawrence Feigen, Ben Klein, Jeff Ahlholm, Mohammed Anwar and Troy Schell.

Feigen co-founded a California-based nursing home operator, SnF Management. Klein operates Juvo BH, an autism treatment business, and Success TMS, a depression treatment business. Ahlholm co-founded a Los Angeles-based investment bank, AGRA Capital.

Anwar is the former chief medical officer of several Prime Healthcare hospitals, a California-based hospital system, and current medical director of Benchmark Hospitalists, a hospital management and consulting company. Schell served as general counsel for Prime Healthcare Management, a subsidiary of Prime Healthcare, before starting his own law firm.

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