UPDATE: This story was updated to include information about health insurance and the Community Health Club.

SAN ANGELO — After months of whispers, speculation and legislative changes to pave the way for it, San Angelo's two hospitals are merging.

Community Health Systems announced Monday, April 20, 2020 that a subsidiary of the company has signed a definitive agreement to sell 171-bed San Angelo Community Medical Center in San Angelo and its associated assets to subsidiaries of Shannon Health System.

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The parties intend to apply for a certificate of public advantage under a new regulatory framework in Texas, involving, among other things, review and approval of the transaction by the Texas Health and Human Services Commission, a news release from Community Health states. This regulatory review process is expected to conclude by the end of the third quarter this year.

"Working together for the benefit of patients across our region makes good sense and we welcome the opportunity to collaborate," said Rod Schumacher, CEO of San Angelo Community Medical Center. "Our organizations have shared a commitment to providing quality, compassionate care for the individuals who come to us for medical services."

The hospital in this transaction is among the additional planned divestitures discussed on the company’s fourth quarter 2019 earnings call. Community Health Systems, based in Franklin, Tennessee, has been selling some of its assets since 2017, when it sold 30 hospitals.

Changes to Texas state law last year opened a pathway allowing the merger of San Angelo's hospitals.

In January, neither Shannon Medical Center nor Community Health Systems had publicly stated any intention to merge.

Rep. Drew Darby said in early January he was “not aware of any (agreement)” related to mergers but introduced the legislation in spring 2019 to protect patients should consolidation occur.

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"(There would be) protections in place for those who live and work in the Concho Valley that access to care is not diminished, that it does not result in an increase in prices to the consumer, and there are protections afforded by the state," Darby said during an interview Jan. 6.

Darby introduced changes to state law allowing for mergers of hospitals in counties with populations of 140,000 people or less that are not adjacent to a metropolitan hospital market. The counties also could not have an existing taxing hospital district.

The only counties that fall into that category are Taylor, Wichita, Tom Green, Bowie, Angelina, Colorado, Cherokee and Wood, according to testimony Darby gave to the state's Public Health Committee on April 3, 2019.

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Mergers would only be allowed "if they can demonstrate a positive impact on the community" and improved quality, efficiency and care, Darby testified.

Shannon CEO Shane Plymell and Hendrick Medical Center CEO Brad Holland spoke in favor of the bill while it was in committee.

On Monday, Plymell said the merger they are pursuing "will utilize the best of both organizations as we preserve and expand access to affordable, high quality healthcare – even as other communities like ours see hospitals close and services disappear.”

During the transition, Shannon said in a news release nothing will change for patients or employees of either organization. During the process of seeking regulatory approval, Shannon Medical Center and San Angelo Community Medical Center will continue to operate as separate and independent organizations.

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“This is not only an opportunity to combine the capabilities and expertise of both organizations, but it also ensures we have a strong, viable and independent hospital system capable of providing the best care at the lowest cost for patients,” said Len P. Mertz, managing trustee of Shannon West Texas Memorial Hospital.

Many people expressed concern after the announcement because Shannon hasn't accepted some insurance plans in the past, forcing them to use Community or seek treatment outside San Angelo.

The website created about the merger, CareForSanAngelo.com, states neither organization will have changes during at least the next 120 days while it undergoes the regulatory process. Afterward, Shannon intends "to honor all existing insurance plans and patients can receive care at either facility," the website states.

Shannon also intends to continue operating the Community Health Club, a hospital-based fitness center.

Learn more about the merger at Shannon's CareForSanAngelo.com.