Connecticut State Office of Health Strategy

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04/03/2024

OFFICE OF HEALTH STRATEGY, YALE NEW HAVEN HEALTH & PROSPECT CT REACH AGREEMENT ON CERTIFICATE OF NEED APPLICATIONS

 

IMMEDIATE RELEASE

March 27, 2024

(Hartford, CT) – The Office of Health Strategy (OHS), Yale New Haven Health Services (YNHHS) and Prospect CT have come to an agreement that approves the Certificate of Need (CON) application for YNHHS’s acquisition of Prospect CT’s three Connecticut hospitals – Waterbury Hospital, Rockville General Hospital, and Manchester Memorial Hospital. The settlement terms will ensure that the quality, access, equity, affordability, and cost-effectiveness standards of the CON statute are met.

This settlement agreement will help guarantee that residents of these communities will have local access to safe and affordable health care. The hospitals will continue providing vital services and will preserve jobs in the community.

Key conditions outlined in the Agreed Settlement include:

 

  • Constraining growth in commercial prices to within 0.5% of the Cost Growth Benchmark Target for 5 years;

     

  • YNHHS will invest a minimum of $6 Million over 3 years to enhance access to mental health and substance use disorder treatment for patients in central western and central eastern Connecticut;

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  • Enhancing the community benefit services and activities at each of the respective hospitals;

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  • Collaborating with the CT Department of Social Services and an Independent Monitor to measure and improve access to specialty physician services for Medicaid patients;

     

  • Engaging with the communities served by each of the respective hospitals by holding regular public meetings and selecting unbiased community representatives to represent the interests of their communities on the hospitals’ boards;

     

  • Developing Strategic Plans to retain and enhance health care services at each of the hospitals, including physician recruitment and resource commitments for clinical service programming;

     

  • Promoting Advanced Alternative Payment Models with payers to improve population health, reduce the rate of unnecessary cost or utilization growth, improve access to primary care, address social determinants of health; and

     

  • Allowing physicians, physician assistants and advanced practice registered nurses to terminate their existing non-compete agreements with Prospect without penalty at the time of the acquisition.

 

Prior to entering confidential settlement negotiations, the proposed health systems’ transaction triggered a statutorily required Cost and Market Impact Review (CMIR); the final report is also being released today. The CMIR addresses key issues such as whether the community would be assured of continued access to high quality and affordable health care, and informed the settlement discussions. 

An Independent Monitor will ensure YNHHS’s compliance with all of the conditions described in this Agreed Settlement for 5 years, and will produce a schedule of required reports and data to be shared with OHS during the performance period.

The settlement also requires Prospect to prioritize resolution of its Connecticut debts, including the payment of $55M in back taxes by the closing date. Additionally, if the terms of the parties’ private agreement materially change between the date of the Agreed Settlement and financial close, OHS has the opportunity to renegotiate and withdraw CON approval.

“We are confident that we’ve come to an agreement that is in the best interest of the residents of Connecticut, which has been our priority since receiving this application” Dr. Deidre Gifford, Executive Director of OHS said. “I want to thank both the Yale and Prospect parties for their collaboration in reaching this agreement. With these conditions in place under the new ownership of Yale New Haven Health, we can expect that these hospitals will continue to operate and provide high-quality services to their patients and communities.”

The Agreed Settlement resolves both the transfer of ownership of the hospitals as well as Northeast Medical Group’s acquisition of Prospect CT’s medical group. All filings related to these dockets can be found in the CON Portal under the Docket Numbers: 22-32594-CON and 22-32606-CON.

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Media Contact:

Tina Kumar-Hyde
Director of Communication, Connecticut Office of Health Strategy
Tina.Hyde@ct.gov

860.969.7228 (Cell)