CT Attorney General Announces Agreement To 'Keep Costs Down' After Rockville/Manchester Hospital Takeover

MANCHESTER/VERNON, CT — Connecticut Attorney General William Tong Monday announced that his office has reached an agreement with Hartford HealthCare to "help protect against rising healthcare costs and ensure professional freedom for doctors to choose where they work as Hartford HealthCare acquires Manchester Memorial and Rockville General hospitals from bankrupt Prospect Medical Holdings."

The agreement resolves an antitrust review by the Office of the Attorney General triggered by the state's "notice of material change" statute, which requires the AG to review certain healthcare transactions, including hospital and physician practice mergers and other transactions, for potential antitrust and anticompetitive concerns to "protect access to high quality and affordable healthcare<' Tong said.

The agreement states, "HHC has agreed to a series of significant conditions designed to mitigate the transaction’s potential anticompetitive effects, including safeguards for physician mobility, commitments to maintain an open medical staff, and obligations to limit reimbursement increases for certain physician services. The Attorney General deems these measures to be in the public interest, as they help ensure that the benefits of preserving the failing business and affiliated physician practice are realized while minimizing the potential for immediate post-merger price increases, reduced patient choice, or diminished competition …"

Manchester Memorial and Rockville General are both generally "lower cost" than Hartford HealthCare hospitals, Tong said. The agreement limits cost increases that Hartford HealthCare can impose at Manchester and Rockville for a period of two years.

The agreement also waives non-compete clauses in physician contracts to enable physicians to move to other jobs within 90 days, should they choose to do so. Importantly, physicians who choose to shift to other hospital systems or physician practices will maintain privileges at Manchester and Rockville under the agreement, among other terms in the agreement.

"I appreciate that Hartford HealthCare has stepped up to acquire and restore Manchester Memorial and Rockville General, and to ensure that the patients in those communities may access affordable, high-quality community-based care after years of mismanagement by private equity. I believe this transaction will be a net positive for Connecticut, for patients and for providers. But healthcare consolidation is concerning, for its potential to raise costs and reduce choice for us all. This agreement seeks to balance the need for stable, new ownership of Manchester Memorial and Rockville General, while ensuring that costs remain affordable and physician careers are protected," Tong said.

Added Gov. Ned Lamont, "At a critical moment for protecting access to quality care and the many jobs that support our health care system, Hartford Healthcare stepped forward to provide stability and ensure continuity of care for the communities that rely on these hospitals. This approved agreement also strikes an important balance by establishing meaningful patient protections, including limits on price increases, and represents good news for patients and for the overall strength of Connecticut’s health care system."

The antitrust review by the Office of the Attorney General is separate from the review process conducted by the Office of Health Strategy. OHS previously approved the transaction on December 10, with the following conditions on Hartford Healthcare:

• Provide an initial assessment of the condition of Manchester Memorial Hospital and the Rockville campus, as well as a strategic integration plan, within nine months
• Engage the community in both strategic planning and community health needs assessment processes within nine months
• Maintain services offered under the Manchester Memorial Hospital license, which includes the Rockville campus, for the later of three years from the closing of the transaction or 90 days after the publication of the second CHNA, including current labor and delivery and intensive care services
• Maintain service levels unless OHS grants prior approval for reductions
• Notify OHS within 30 days of any reallocation of inpatient beds or relocation of outpatient services

In addition, the conditions require preservation of a 24/7 Emergency Department in the town of Vernon (at Rockville General), for at least three years and maintenance of the full complement of inpatient behavioral health services at or within 30 miles of the RGH campus.

Said Tong, "In 2016, Prospect bought three of Connecticut's nonprofit, community hospitals, promising robust investment and careful quality control. They said they would improve the hospitals' facilities and expand their services. They said they would scrupulously guard their patients’ sensitive health information. Above all else, they said they would faithfully care for the health of Connecticut’s residents. None of that was true. Prospect took Connecticut's community hospitals for-profit and then sold the ground out from under them to fund massive investor payouts. They got rich deceiving the State’s enforcers; throttling its healthcare infrastructure; compromising the most private information of its residents; stiffing vendors; shortchanging the State through unpaid taxes; and endangering residents through compromising on vital medical care."

He also said, ":The Office of the Attorney General is actively involved in the ongoing bankruptcy proceeding for Prospect Medical Holdings, and has filed a proof of claim in the proceeding asserting claims for negligent misrepresentation, unjust enrichment, negligent performance of duties, violations of privacy laws and violations of the Connecticut Unfair Practices Act. The claim ensures that Connecticut continues to have a full seat at the table in facilitating the transition of Prospect’s hospitals in the state to a responsible new owner, and that Prospect is held accountable through the bankruptcy proceeding for the harm it has inflicted on the state and its patients."

State Sen. Jeff Gordon, a practicing physiciam whose 35th District falls in the Rockville Hospital territory, said that, generally speaking, "as hospital systems get bigger and bigger, cost goes up."

But, in the case of the merger, he added, "In general, I don't like consolidation, but on other hand, we can't let these hospitals close. Yes, this can be viewed as a BandAid, but at this point, what else can we do? We'll just keep this on the radar screen."