R.I. agencies agree to review Yale-L+M merger but Conn. balks

Lawrence + Memorial Corp., the parent of Westerly Hospital since 2014, has had its application to merge with Yale-New Haven Health Services accepted for review by Rhode Island agencies. But Connecticut does not want to take any action until Jan. 15, 2017.  / COURTESY WESTERLY HOSPITAL
Lawrence + Memorial Corp., the parent of Westerly Hospital since 2014, has had its application to merge with Yale-New Haven Health Services accepted for review by Rhode Island agencies. But Connecticut does not want to take any action until Jan. 15, 2017. / COURTESY WESTERLY HOSPITAL

PROVIDENCE – On Friday, the R.I. Attorney General and the R.I. Department of Health announced that the Expedited Review Hospital Conversion Initial Application, which was submitted by Yale-New Haven Health Services Corp. and Lawrence + Memorial Corp., LMW Healthcare Inc., d/b/a Westerly Hospital, is complete and accepted for review. Now, the DOH and the Attorney General are charged with initiating the formal review and evaluation of the hospitals’ application. Under the Hospital Conversions Act’s expedited review requirements, the agencies have 90 days to complete this step of the process. The Hospital Conversions Act provides for three possible outcomes: approve the application, reject the application or approve with conditions.

However, Conn. Gov. Dannel Malloy’s executive order is expected to delay the proposed affiliation, notwithstanding the two hospital systems’ desire to proceed apace. Signed on Feb. 25, the executive order states, in part: “To provide the necessary time for a fair and thorough review of the [certificate of need] process, the Department of Public Health and the Department of Social Services are directed not to make any final decisions on any [certificate of need] application – including those previously received and currently under review – until Jan. 15, 2017…”

In 2014, Lawrence + Memorial Hospital, in New London, Conn., rescued Westerly Hospital from bankruptcy by purchasing the struggling entity. Then, in July 2015, Lawrence + Memorial Corp. – the parent company of the two hospitals – agreed to join the Yale-New Haven Health System, which was then Connecticut’s largest hospital network.

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