Community Health Systems has a tentative deal in place to sell a three-hospital Pennsylvania system to nonprofit Tenor Health Foundation, representatives of the companies have confirmed.
The planned handoff was reported yesterday by the Scranton Times-Tribune and other local outlets, citing an internal correspondence and confirmations from officials. The arrangement involves Scranton, Pennsylvania-area Commonwealth Health and its three hospitals—Regional Hospital of Scranton, Moses Taylor Hospital and Wilkes-Barre General Hospital—and their affiliated care sites.
Tomi Galin, executive vice president of corporate communications and marketing at CHS, told Fierce Healthcare that the organizations had signed a letter of intent last week.
“This is the first step in a process that we all hope will result in a completed transaction and preserve the healthcare services provided by Commonwealth Health,” she wrote in an email. “As the process moves forward, we'll share any future major updates.”
"We look forward to working with the communities served by these facilities," Tenor CEO Radha Savitala said in a statement confirming the news.
CHS had hoped to sell off the hospitals last year to WoodBridge Healthcare, another nonprofit. The pair had signed an asset purchase agreement in July 2024 valued as $120 million but, in late November, mutually agreed to scrap the deal.
At the time, CHS said the stumble was “due to WoodBridge’s inability to satisfy the funding requirements” and that it would “evaluate future options for Commonwealth Health in light of the termination of this transaction.”
Concerns swirled during the following months that without a new buyer, two of the hospitals, Regional and Moses, could be closed down. A coalition of local foundations and nonprofits has provided millions of dollars in temporary financial support to ensure operations at these facilities would continue, the Scranton Times-Tribune reported. A spokesperson for those organizations as well as local government leaders told the paper they were encouraged by the signed letter of intent.
Tenor Health Foundation, the purchaser, is a nonprofit recently formed by former Prime Healthcare executives that aims to own, lease, manage and turn around operations at struggling small to medium-sized hospitals, according to its website. It does so through a “focus on efficiency of revenue cycle, enchaining service lines as appropriate and expense management in areas such as salaries and benefits, professional services, purchased services and supply chain.”
Tenor earlier this year received Pennsylvania’s blessing to take over operations at another hospital, Sharon Regional Medical Center, previously owned by the bankrupt Steward Health Care. That facility resumed core services in March and fully reopened by May.