Antitrust Settlement Allows Faxton-St. Luke's Healthcare, St. Elizabeth Medical Center to Affiliate

Faxton-St. Luke's Healthcare and St. Elizabeth Medical Center, both in Utica, N.Y., have settled antitrust concerns with the state of New York, allowing the two financially troubled hospitals to move forward with a proposed affiliation.

The hospitals submitted a certificate of need application to the New York State Department of Health in October to move forward with the affiliation, driven by doubt from both hospitals concerning their ability to continue functioning independently in the low-income area and while facing stiff competition from other hospitals in the region.

The settlement is designed to relieve financial pressures on both hospitals by combining some services without using their increased market presence to increase prices. Terms of the settlement include:

    • A prohibition on requiring independent physicians to work exclusively at the hospitals or entering into contracts with payers that involve other providers being reimbursed at lower rates.
    • A temporary rate protection that gives payers the right to continue in their current relationships with the hospitals at the current prices for five years, with annual increases that do not exceed historic levels.
    • Continued monitoring by the New York Attorney General to ensure the settlement is being honored.

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