Tim Tai, Senior Photographer

Connecticut Governor Ned Lamont and Comptroller Sean Scanlon called on Yale New Haven Health system and Prospect Medical Holdings to finalize a $435 million acquisition agreement. 

Two years ago, the healthcare system first signed an agreement with Prospect Medical Holdings to acquire Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital. Since then, the parties have repeatedly clashed in court, with the YNHH system alleging that Prospect’s financial mismanagement and operational failures violated their purchase agreement. Prospect, in turn, has accused the healthcare system of delaying acquisition to lower the purchase price. 

State officials argue that the deal’s collapse would have a “detrimental impact” on the communities the three hospitals serve, as they could lose access to medical coverage. Recently, the Connecticut Office of Health Strategy, or OHS, accused Rockville General Hospital of violating state law by terminating surgical and psychiatric services at the hospital without approval.

“The dispute lingers on, and I’m not quite sure we’ll be able to keep them out of the courthouse,” Lamont stated in a press conference on Tuesday. “So in the meantime, I care deeply about patient safety there, making sure that we monitor that situation closely.”

Lamont shared that in addition to the ongoing lawsuits, the alleged halting of services at the hospital has led him to involve an independent monitor who can oversee patient care. He wants to ensure that safety is not compromised as the dispute and budget concerns continue.

In an Oct. 17 letter acquired by Hartford Business to Deborah K. Weymouth, CEO of Prospect Medical Holdings’ Connecticut Operation, OHS asserted that the hospital system ceased providing critical services, including psychiatric care, without seeking additional permission and has not yet restored these services.

OHS has asked Prospect CT about the timeline and reasons for these service halts, demanding an explanation and supporting documents by Oct. 31.

Meanwhile, Prospect continues to procure debt. 

Last month, the Pension Benefit Guaranty Corporation claimed that Prospect failed to contribute just over $4 million to the pension plan covering employees of Waterbury, Manchester Memorial and Rockville General hospitals. 

The Corporation obtained liens placed on 47 properties associated with Prospect — meaning that it could force Prospect to sell them to cover their debt. To keep these properties, Prospect will have to pay off its pension obligations. Additionally, Prospect owes nearly $12 million Prospect to Pennsylvania’s Crozer-Keystone Health System Employees Retirement Plan, $67 million in tax liens from the state of Connecticut and $15.8 million in taxes to the city of Waterbury. 

If Yale’s healthcare system were to acquire three Prospect hospitals, it would likely be responsible for part of this debt. 

The YNHH system is seeking revised terms to continue the acquisition of the three hospitals. 

“Without revised terms, we don’t see a path forward that would allow us to make the necessary investments in these facilities without jeopardizing our system’s financial sustainability and uphold our commitment to the communities that we currently serve,” Dana Marnane, director of public relations at Yale New Haven Health, wrote in a Thursday statement to the News.

After weeks of silence, on Oct. 17, Prospect issued a statement accusing Yale New Haven Health of waging “an aggressive campaign in both the courts and via the media to denigrate Prospect Medical’s Connecticut hospitals and employees” to reduce the negotiated purchase price of $435 million. 

State officials hope the deal will be closed soon. 

“I think there’s a lot of concerns within these communities that are affected by this,” Comptroller Sean Scanlon told Hearst Connecticut Media. “I think the time to get it done is now. And if it can’t be done, then I think we need to move on to what is the next best thing.”

In response, Lauresha Xhihani, the director of communications and marketing at Waterbury Hospital representing Prospect Medical Holdings wrote to the News that Prospect has been ready to close the deal since it was approved by state regulators. 

The acquisition would add 700 more beds and roughly 4,400 more employees to the health system. 

“The collapse of the deal for YNHH to acquire the three Prospect hospitals has a detrimental impact on the communities they serve,” state Sen. Saud Anwar SPH ’98, who chairs the Public Health Committee, wrote to the News in August. 

Prospect Medical Holdings owns 16 hospitals in five states.