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Partners HealthCare, South Shore Hospital Merger Postponed

Boston-based Partners HealthCare System has agreed to delay the closing of its proposed acquisition of South Shore Hospital in Weymouth, Mass., to allow for the extension of negotiations with the state attorney general's office, according to a report from The Boston Globe.

Hospital officials will continue negotiations with regulators in Attorney General Martha Coakley’s office concerning Partners' takeover of the 378-bed hospital and an affiliated physicians group, Harbor Medical Associates, according to the report.

In accordance with state law, Partners could have closed the deal today, according to the report.  By striking an agreement with state regulators before the merger moves forward, Partners could potentially face added limitations on its ability to expand market power. However, closing the acquisition without such an agreement could leave Partners open to a lawsuit challenging the transaction, according to the report.

The merger has received considerable scrutiny since it was first proposed in 2012. Last month, the Massachusetts Health Policy Commission released a report concluding the transaction would increase total medical spending by $23 million to $26 million annually because of increases in physician prices and increased utilization of Partners and South Shore facilities. The commission members also wrote that the resulting larger system would have more leverage to negotiate for higher prices from private payers.

In addition to its conclusions that the deal would lead to higher costs and less competition, the panel said Partners and South Shore did not provide adequate evidence on how the merger would improve South Shore performance and how integration is necessary to achieve proposed care delivery reforms. Because the commission lacks the power to block mergers, it referred the case to Ms. Coakley's office for review.

Partners has refuted the commission's findings, claiming the report ignores savings from improving the coordination and quality of care for privately insured patients and that the acquisition of South Shore and a related physicians' group would actually save approximately $27 million per year through population health management and care coordination efforts. Partners also says the watchdog agency misinterpreted physician contracts with insurers.

 Ms. Coakley and the U.S. Department of Justice have already been reviewing the proposed acquisition as part of a broader review regarding alleged anticompetitive behavior on behalf of Partners. The attorney general's office and the DOJ declined to comment on current negotiations with Partners, according to the Globe.

More Articles on Partners HealthCare:
Massachusetts: Partners, South Shore Merger Would Up Costs, Hurt Competition  
Partners, Hallmark Health Nail Down Definitive Affiliation Agreement  
Partners HealthCare Disputes State's Negative Assessment of South Shore Acquisition 

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