‘Groundbreaking’ agreement reached between Mass. AG and Partners on hospital acquisitions

Massachusetts Attorney General (AG) Martha Coakley announced a comprehensive agreement with Boston-based Partners HealthCare allowing the system to acquire South Shore Hospital and Hallmark Healthcare.

The resolution would change the negotiating power of Partners HealthCare for 10 years and control healthcare costs across its entire network. The agreement must be finalized by the court and approved by June 16, according to the AG's office.

The agreement’s conditions include:

• Allowing payers to split Partners into separate contracting entities for up to 10 years;
• Preventing Partners from contracting with affiliate physician groups that are not part of its owned hospital for 10 years;
• Capping health costs at the rate of inflation across the entire Partners network through 2020;
• Capping its physician growth for five years; and
• Blocking further hospital expansion in eastern Massachusetts, including Worcester County, for the next seven years.

“Suing Partners would potentially block further expansion of its network, but would also maintain the status quo in the market,” Coakley said. “We believe this agreement will do much more. It fundamentally reduces the negotiating power of Partners for the next 10 years to better control health costs for families and businesses, and help level the playing field in the market.”

The AG Office and the Department of Justice have been conducting an antitrust investigation into Partners HealthCare for months. In February, the Health Policy Commission released a report concluding that Partners’ acquisition of South Shore would result in increased costs and referred the report to the AG’s office for further investigation.