The acquisition of Saint Clare's Health System by California-based Prime Healthcare Services has cleared a major hurdle with the unanimous approval Thursday of the New Jersey State Health Planning Board.
State Health Commissioner Mary O’Dowd now has 120 days to make a final decision, according to department spokeswoman Donna Leusner.
Saint Clare’s, which has been operating at a deficit, has hospitals in Denville, Dover and Boonton.
The state has given Prime approval to acquire St. Mary’s Hospital in Passaic, and Prime is currently seeking state approval to take over Saint Michael’s Medical Center in Newark.
Saint Clare’s Chief Executive Les Hirsch said in a statement Friday that the health system “is pleased that yesterday the State Health Planning Board unanimously supported the transfer of ownership of Saint Clare’s facilities to Prime Healthcare Services.”
Hirsch said: “The meeting was a positive discussion among all the parties present. Yesterday’s actions are an important milestone in the regulatory review process because it moves us closer to the completion of the transaction for Prime to acquire Saint Clare’s.”
India Hayes Larrier, who represents New Jersey Citizen Action and its Campaign to Protect Community Healthcare, said she is concerned that Prime’s for-profit health care model won’t be in the best interests of the communities served by Saint Clare’s.
She said among the conditions imposed on the sale by the state health planning board is that Prime negotiate in good faith with health insurance providers.
Larrier said: “If Prime does not negotiate insurance contracts in good faith, then people will pay more because those hospitals will be out of network. Our concerns are that Prime’s business model will possibly make health care in the communities where they are taking over unaffordable.”
Prime is proposing to pay $33 million for Saint Clare's Dover campus and $75 million for its Denville, Boonton and Sussex facilities.
According to the State Health Planning Board, it is recommending that O'Dowd approve the sale subject to several conditions, including the retention of "substantially all" of the 320 employees at the Dover campus and the 1,150 employees at the Denville, Boonton and Sussex facilities.
Other conditions include that Prime provide regular and continuing care for indigent patients.
Regarding community health programs, Prime would need prior written approval from the state to reduce, relocate or eliminate any program offered by the former ownership of St. Clare's in Dover or Denville for at least five years.
And Prime would be required to negotiate in good faith for in-network insurance contracts at rates commensurate with those generally charged in northern New Jersey.
Prime spokesman Edward Barrera said of the planning board's unanimous recommendation in favor of Prime's acquisition, "We appreciate its due diligence, and we hope the process moves forward expeditiously so that we can assist these hospitals in providing the high quality health care the community and residents need and deserve."
He said Prime expects to close on its purchase of St. Mary's Hospital on Aug. 15.
Prime operates 27 acute care hospitals in seven states and has more than 30,000 employees.
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