CT lawmakers pass bill on hospital mergers, practice acquisitions

Lawmakers in Connecticut passed a complex bill that will make it easier for hospitals to convert to for-profit status while providing another layer of oversight regarding sales involving acute care facilities and physician practices.

The bill allows for-profit hospitals to establish medical foundations, which will make it easier for them to acquire and manage physician practices, according to the Connecticut Mirror. Under the current law, it was all but impossible for for-profit hospitals to employ doctors directly.

The bill also puts more strictures in place when a for-profit attempts to purchase a non-profit hospital. It would require the Connecticut Public Health Commissioner to determine whether such a transaction would impair access to care. Both parties involved with the transaction would also have to hold at least one public hearing in the jurisdiction where the hospital changing hands is located. And both the public health commissioner and attorney general have the ability to attach conditions to the sale.

The bill was apparently spurred by for-profit hospital chain Tenet Healthcare Corp., which sponsored and helped write it after the organization encountered difficulties acquiring physician practices, according to the Middletown Press. Tenet also recruited Yale-New Haven Hospital, one of the state's biggest providers, to help get the legislation drafted and passed. Tenet and Yale-New Haven announced a pending partnership deal earlier this year. However, the bill's critics say that it could add unnecessary complications to mergers and affiliations.

Merger and acquisition activity among Connecticut's hospitals is heating up. There were a total of seven deals announced between 2009 and 2013, compared to four in the entire prior decade. About half of the state's 29 hospitals are involved in some form of formal affiliation or partnership.

It is unknown if Gov. Daniel P. Malloy will sign the bill into law, although the Mirror reported that his administration had a hand in crafting its specifics.

To learn more:
- read the Connecticut Mirror article
- here's the Middletown Press article

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