Nuvance Health, Northwell reach settlement with state for hospital affiliation
Photo | Danbury Hospital
Danbury Hospital
State hospital regulators said Tuesday they had reached a settlement agreement with Nuvance Health and Northwell Health that will allow the two health systems to merge.
Northwell Health, a 21-hospital New York-based nonprofit health system, and Nuvance Health — which owns Danbury, Norwalk, Sharon and New Milford hospitals in Connecticut and three hospitals in New York — first announced plans to merge in February last year and filed a Certificate of Need (CON) application last May.
The state Office of Health Strategy, which oversees the CON application process for hospital and health system mergers and acquisitions, said that under the settlement agreement, ownership of Danbury Hospital (including its New Milford campus), Norwalk and Sharon Hospitals will be transferred to Northwell Health.
The agreement also sets conditions intended to safeguard the interests of Connecticut patients and providers, including price constraints tied in part to the state’s cost growth benchmark, OHS said.
As part of the affiliation, Northwell agreed to invest at least $1 billion across the Nuvance hospitals in Connecticut and New York over the next five years. The agreement also requires annual reports detailing Northwell's progress made toward completing those investments.
In addition, the agreement prohibits any real estate sale leaseback transactions for at least five years. The state legislature is considering legislation to either provide greater oversight over or ban real estate sale leaseback transactions after Prospect Medical Holdings Inc. sold and leased back the properties where its Connecticut hospitals — Waterbury, Manchester Memorial and Rockville General — are located, creating a significant financial hardship for the struggling care providers.
Specific conditions of the Northwell-Nuvance agreement include:
- Constraining growth in commercial prices so negotiated rates do not exceed the average of the state’s cost growth benchmark target and the Consumer Price Index for medical care in New England (CPI-U Medical).
- Adoption of Northwell’s more generous financial assistance policies at Nuvance hospitals
- Maintaining all inpatient clinical services and recognizing all collective bargaining agreements.
- Developing strategic plans to retain and enhance healthcare services at each hospital, including physician recruitment and resource commitments for clinical service programming, and
- 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 and address social determinants of health.
The settlement also aligns with and incorporates the agreement of assurances state Attorney General William Tong and New York Attorney General Letitia James reached with the health systems in August, including preserving labor and delivery services at Sharon Hospital for the next five years, OHS said.
Four New York hospitals currently operated by Nuvance will also join the Northwell system, it said.
Gov. Ned Lamont said the deal is fair and benefits both patients and providers, “while strengthening and stabilizing healthcare throughout Western Connecticut."
OHS Commissioner Dr. Deidre Gifford said “Northwell Health will strengthen the capacity of these hospitals to provide accessible, affordable, high-quality care in the diverse urban, suburban and rural communities they serve.”
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