CHARLESTON — After many years of attempts by the West Virginia Legislature to sell one or all four of the state’s publicly owned long-term care facilities, those hospitals are now in private hands.

Gov. Patrick Morrisey announced Saturday that the sale of Hopemont Hospital in Preston County, Jackie Withrow Hospital in Raleigh County, John Manchin Sr. Health Care Center in Marion County and Lakin Hospital in Mason County to New York-based Marx Development Group was finalized.

“This marks an important milestone in our work to strengthen healthcare services and modernize the state’s operations,” Morrisey said in a statement Saturday. “West Virginia patients can look forward to enhanced care, modernized facilities, and a commitment to quality care. This is another step forward in improving care outcomes for our patients while protecting taxpayer dollars.”

Morrisey announced on Aug. 12 that MDG had agreed to purchase the four state-owned long-term care facilities. The sale was supposed to close at the end of September, but MDG exercised an option to extend the closing date by 30 days.

According to an Aug. 11 asset purchasing agreement between MDG and the state obtained from the Governor’s Office through a Freedom of Information Act request, MDG agreed to pay the state $60 million in cash combined with an $80 million ancillary consideration component.

The additional $80 million would cover operational losses during the transition period as the state-owned long-term care facilities transfer to private for-profit facilities managed by MDG subsidiary Majestic Care, a long-term care company with facilities in Indiana, Michigan and Ohio.

In the agreement, MDG/Majestic agreed to continue to care for the mix of low-income and indigent patients, those with intellectual and developmental disabilities, those with substance use disorder, and older incarcerated patients or other wards of the state. State employees formerly with the four facilities have the option of remaining as employees of MDG/Majestic with the same salary and tenure.

“We’re honored to welcome these West Virginia communities and the dedicated caregivers who serve within them to the Majestic Care family,” Majestic Care CEO Paul Pruitt said in a statement Monday. “Our focus is on people and ensuring residents continue to receive the highest quality care and that our team members have the support, resources, and respect they deserve. This isn’t just about expanding our footprint; it’s about strengthening access to compassionate, quality care in communities that need it most.”

The $80 million would also fund the acquisition and construction of a minimum of three new facilities. If MDG is able to fulfill those obligations for less than $80 million, the remaining balance would be paid to the state.

The Department of Health Facilities under former Gov. Jim Justice contracted with Lument Securities LLC in August 2024 to develop a plan that included selling the four long-term care facilities to potential buyers. Lument reached out to MDG/Majestic Care in the fall of 2024. Negotiations were paused during the transition from Justice to Morrisey, who took office on Jan. 13, picking back up again a few months later.

House Bill 2006, passed in 2023, split the former Department of Health and Human Resources into three new departments: the Department of Health, the Department of Human Services and the Department of Health Facilities, which oversees the four long-term care facilities and three state-owned psychiatric hospitals. As part of that bill, DHF Secretary Michael Caruso was empowered to sell the facilities under his supervision.

“Throughout his administration, Governor Morrisey has been instrumental in supporting strategic actions and economic initiatives that increase the efficiency of State government, provide economic opportunities for local communities, and improve the quality of life for the citizens of West Virginia,” Caruso said. “The sale of the long-term care facilities is the perfect amalgamation of those goals, representing an unprecedented opportunity for the State.”

State officials have said the four long-term care facilities — which have 511 licensed beds – operate at a combined $6 million annual loss, with long-term projected costs expected to rise to nearly $40 million per year. The four facilities are also in need of significant capital investments to update and renovate them at an estimated cost of $100 million.

MDG plans to build three to five new health care facilities to replace the aging Hopemont, Jackie Withrow, John Manchin and Lakin hospitals. The purchasing agreement establishes a detailed timeline with specific deadlines for site acquisition, financing, permitting and construction, but the agreement includes no guarantees the new facilities would be in the same areas as the existing hospitals.

Failure to meet the milestones would trigger significant financial penalties, including escalating escrow deposits. A material failure by MDG to develop the new facilities, such as failing to acquire land within 365 days of closing or failing to apply for certificates of occupancy within 780 days, would result in an automatic payment of $45 million to the state.

MDG also is bound by an “operations covenant” to ensure continuous operation of the existing long-term care facilities until the new ones are complete. The company would be required to operate the new facilities for a minimum of three years post-completion and maintain specific bed capacities.

According to Morrisey, MDG/Majestic also agreed to continue a leasing agreement with FMRS Health Systems, which operates a separate mental health care facility at Jackie Withrow Hospital, as well as continue an agreement with the Division of Corrections and Rehabilitation for a two-year lease which can then be renewed on an annual basis for an additional five years if all parties agree.

State Sen. Joey Garcia, D-Marion filed a lawsuit seeking to block the sale of John Manchin Hospital in Fairmont in his private capacity as an attorney representing a resident at the facility. But a circuit court judge last week ruled that the sale could continue.

“I expected optimism that we would eventually prevail,” Morrisey said Wednesday during a press conference at the State Capitol Building. “It was so clear that we had the authority to do what we did. And so, we were really gratified that the judge affirmed that thinking.”