The Office of Health Strategy in Connecticut has approved a certificate-of-need application from Yale New Haven (Conn.) Health that puts it one step closer to purchasing three Connecticut hospitals from Los Angeles-based Prospect Medical Holdings.
Yale New Haven and Prospect are working together to formalize remaining ancillary agreements with hopes to transfer ownership of the hospitals in the next few weeks, a spokesperson from Prospect said in a statement shared with Becker's.
"We are working with Prospect to reach agreement on several outstanding details that must be resolved to allow the transaction to close," a spokesperson for Yale New Haven said in a statement shared with Becker's. "We are hopeful that these details can be addressed, so we can extend the benefits of nonprofit, academic medicine to more patients across our region."
Yale New Haven initially signed a deal in November 2022 to acquire the hospitals: Waterbury (Conn.) Hospital; Manchester (Conn.) Memorial Hospital, part of Prospect's Manchester-based Eastern Connecticut Health Network; and Rockville General Hospital in Vernon, Conn. The proposed price tag was $435 million.
To get the state's long-awaited approval, OHS, Yale New Haven and Prospect reached an agreement, obtained by Becker's, that would ensure specific terms be met for the hospitals.
The terms include Yale New Haven investing at least $6 million into the hospitals over three years to improve patient mental health and substance use disorder treatment access; enhancements to the hospitals' community benefit services and activities; engagement with communities served by the hospitals through regular public meetings and investing in unbiased community representatives to speak for community interest on the hospitals' boards; and strategic plans to improve healthcare services at each hospital.
Providers, provider assistants and advanced practice registered nurses must also be allowed to terminate their current Prospect noncompete agreements at the time of an acquisition without penalty under the agreed upon terms.
Prospect will also be responsible for prioritizing its Connecticut debts, which includes the payment of $55 million in back taxes by the closing date on the hospitals.
"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," Deidre Gifford, MD, executive director of OHS, said in a March 27 release shared with Becker's.
Should Yale New Haven and Prospect reach an agreement, an independent monitor from the state will ensure compliance under the agreed upon certificate-of-need terms for the next five years.