AG Healey threatens lawsuit against Partners

STATE HOUSE, BOSTON, JAN. 26, 2015…..Attorney General Maura Healey on Monday publicly signaled her concerns with a proposed accord that would allow Partners HealthCare to acquire more hospitals, stating that she would go to court to block the South Shore Hospital portion of the merger if a judge rejects the deal.

The state’s agreement with Partners, meant to be an alternative to a lawsuit by the attorney general’s office, was negotiated by Healey’s predecessor and former boss, Martha Coakley.

The proposed multi-layered agreement would allow Partners to acquire three hospitals, including South Shore Hospital and two hospitals in the Hallmark Health System in northeastern Massachusetts, with a set of accompanying restrictions.

Healey said in a court filing that if the accord, which is being weighed by a Superior Court judge, is rejected, she will exercise her right to “void” the agreement and then move through litigation to block Partners’ proposal to merge with South Shore Hospital in Weymouth.

Healey wrote that she would “further evaluate” the Hallmark part of the accord separately if the judge, Janet Sanders, rejects the agreement.

Sanders, during a hearing in November, said she wanted to hear from Healey, who had said she had concerns but did not detail them until Monday. “I just want her to say that she’s behind this and take the very public and political stand that this is something that she supports,” Sanders said at the hearing.

If Sanders approves the deal, which was submitted in June 2014 and amended in September 2014 to include price caps for the Hallmark portion, Healey said she will “vigorously” enforce it.

The deal’s approval would also resolve a long-running anti-trust investigation and a potential lawsuit from the attorney general’s office.

In the three-page court filing, Healey said she shares some of the concerns that the judge has raised about the deal.

Healey pointed to the proposed accord’s various restrictions — five year limit on the number of physicians, restriction of six and a half years for price growth and a ten-year restriction on component contracting — and said that after they expire “a larger, post-expansion Partners may wield market leverage that is greater than its current, already significant market leverage.”

Generally, the accord “would allow Partners to grow but conditions that expansion on the promise of future price restrictions and changes to Partners’ contracting practices,” she wrote. “I would prefer to reverse that order of events and instead consider any future proposed Partners’ expansion only after Partners demonstrates an ability to contribute to health care cost containment in Massachusetts.”

She added that “litigation inherently is uncertain, and that is no different here,” but noted the public comments to Sanders made by Partners’ competitors, health care analysts and others since the accord was first filed in court in June.

In a statement, Partners spokesman Rich Copp said, “We remain deeply committed to working with South Shore Hospital and Hallmark Health in order to deliver more coordinated care to patients in those communities at lower costs. We believe strongly in this vision and we await the Judge’s ruling on the proposed consent judgment.”

Emerging from a meeting with top House and Senate lawmakers after Healey’s office released the filing, Gov. Charlie Baker said he was “pretty focused” on the winter storm hitting Massachusetts and he wanted to read Healey’s comments.

Baker, a former health insurance executive, called the Partners accord “very, very complicated.”

“And I actually proposed what I thought would have been a much more simple agreement. But, you know, obviously the agreement was the only agreement on the table because it was the one negotiated by the AG,” he added. “And I’m as anxious as anybody to have the judge make a decision so that we can move forward one way or the other from here.”

Asked whether he believed the judge should reject the proposed deal, Baker said, “I think that’s her call. And, like I said, I thought the original agreement was very complicated, and I’ve read it three or four times, and had trouble understanding exactly how it would work as a practical matter.”

An independent health care agency, the Health Policy Commission (HPC), has raised concerns about the proposal’s impact on health care pricing, and a coalition of Partners’ competitors has voiced its opposition to the deal.

The chair of the commission, Dr. Stuart Altman, called Healey’s concerns “consistent” with what the commission has said, “including the factors that would result in increased health care premiums for employers and consumers.”

“Whatever the Court’s ruling in this matter, the HPC will strongly support and work with the Attorney General to achieve our shared goal of a more affordable and transparent health care system in Massachusetts,” Altman said in a statement.

While weighing whether to approve or reject the accord, Sanders expressed interest in hearing from Healey during a court hearing on Nov. 10, days after Coakley lost the gubernatorial election to Baker.

“Isn’t there a third alternative that I delay until January and see what Maura Healey thinks about it? I’m not saying I’m going to do that but what about that?” Sanders asked attorneys with Coakley’s office, Partners and the hospitals.

First Assistant Attorney General Christopher Barry-Smith, who remains in the attorney general’s office, told the judge that she “need not wait.”

The judge recessed the hearing without issuing a decision or a future court date.

On Monday, David Balto, an attorney who joined several others in raising concerns about the deal on behalf of the nonprofit American Antitrust Institute, said Healey’s comments make “eminent sense.”

“Never has there been a merger where the key interest groups — patients, consumers, unions, employers and insurers raised such profound concerns,” he said in an email. “Her statement raises substantial doubt about this deal.”

A coalition of providers that includes Atrius Health, Beth Israel Deaconess Medical Center, Lahey Health System and Tufts Medical Center said in a statement that Healey had offered “valuable guidance” on the impact of Partners’ expansion on the health care market and patients.

“We appreciate not only the thoughtfulness with which the Attorney General approached this matter but also her timeliness in addressing her concerns to the Court,” the coalition said. “We recognize that this would not have happened without the public process around the Consent Judgment, which began four months ago, involved many individuals and organizations and shed light on what has been considered an issue of critical importance to the Commonwealth: how to contain costs within the health care system while continuing to provide residents of Massachusetts with high quality care.”

Copyright 2015 State House News Service

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