The shuttered St. Dominic’s mental health unit will reopen under the management of a for-profit, Texas-based company next month.
Oceans Behavioral Hospital Jackson, a 77-bed facility, will provide inpatient behavioral health services to adults and seniors and add intensive outpatient treatment services next year.
“Jackson continuously ranks as one of the cities for our company that shows one of the greatest needs in terms of behavioral health,” Oceans Healthcare CEO Stuart Archer told Mississippi Today at a ribbon cutting ceremony at its location on St. Dominic’s campus Thursday. “…There’s been an outcry for high quality care.”
St. Dominic’s 83-bed mental health unit closed suddenly in June 2023, citing “substantial financial challenges.”
Merit Health Central, which operates a 71-bed psychiatric health hospital unit in Jackson, sued Oceans in March, arguing that the new hospital violated the law by using a workaround to avoid a State Health Department requirement that the hospital spend at least 17% of its gross patient revenue on indigent and charity care.
Without a required threshold for this care, Merit Health Central will shoulder the burden of treating more non-paying patients, the hospital in South Jackson argued.
The suit, which also names St. Dominic’s Hospital and the Mississippi Department of Health as defendants, awaits a ruling from Hinds County Chancery Court Judge Tametrice Hodges-Linzey next year.
The complaint does not bar Oceans from moving forward with its plans to reopen, said Archer.
Oceans operates two other mental health facilities in Mississippi and over 30 other locations in Louisiana, Oklahoma and Texas.
“Oceans is very important to the Coast, to Tupelo, and it’s important right here in this building. It’s part of the state of Mississippi’s response to making sure people receive adequate mental health care in Mississippi,” said Lt. Governor Delbert Hosemann at the Nov. 21 ribbon cutting.
Some community leaders have been critical of the facility.
“Oceans plans to duplicate existing services available to insured patients while ignoring the underserved and indigent population in need,” wrote Hinds County Sheriff Tyree Jones in an Oct. 1 letter provided to Mississippi Today by Merit Health.
Massachusetts-based Webster Equity Partners, a private-equity firm with a number of investments in health care, bought Oceans in 2022. St. Dominic’s is owned by Louisiana-based Catholic nonprofit Franciscan Missionaries of Our Lady Health System.
Oceans first filed a “certificate of need” application to reopen the St. Dominic’s mental health unit in October 2023.
Mississippi’s certificate of need law requires medical facilities to receive approval from the state before opening a new health care center to demonstrate there is a need for its services.
The Department of Health approved the application under the condition that the hospital spend at least 17% of its patient revenue on free or low-cost medical care for low-income individuals – far more than the two percent it proposed.
Oceans projected in its application that the hospital’s profit would equal $2.6 million in its third year, and it would spend $341,103 on charity care.
Merit Health contested the conditional approval, arguing that because its mental health unit provides 22% charity care, Oceans providing less would have a “significant adverse effect” on Merit by diverting more patients without insurance or unable to pay for care to its beds.
Oceans and St. Dominic’s also opposed the state’s charity care condition, arguing that 17% was an unreasonable figure.
But before a public hearing could be held on the matter, Oceans and St. Dominic’s filed for a “change of ownership,” bypassing the certificate of need process entirely. The state approved the application 11 days later.
Merit Health Central then sued Oceans, St. Dominic and the State Department of Health, seeking to nullify the change of ownership.
“The (change of ownership) filing and DOH approval … are nothing more than an ‘end run’ around CON law,” wrote Merit Health in the complaint.
Oceans, St. Dominic’s and the Mississippi Department of Health have filed motions to dismiss the case.
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