AG Neronha cautiously optimistic about Lifespan deal to buy St. Anne’s, Morton

Rhode Island Attorney General Peter Neronha signaled on Monday that his office plans to scrutinize Lifespan's proposed takeover of two troubled Massachusetts hospitals in order to ensure the transaction won't harm patient care in Rhode Island. The state's largest health employer, which is set to be renamed Brown University Health later this year, seeks to purchase St. Anne’s Hospital in Fall River and Morton Hospital in Taunton. These facilities were formerly owned by Steward Health Care, which is currently navigating bankruptcy proceedings.

Neronha stated that his primary objective is to safeguard patient care within Rhode Island while assessing the broader impact on the regional medical marketplace. His scrutiny will focus on antitrust concerns and the protection of charitable assets.

Related imagery

Regulatory oversight and market concerns

According to Neronha, the evaluation of the deal will hinge on whether St. Anne’s and Morton are considered part of the same market as the existing network of Lifespan facilities, which includes Rhode Island Hospital, The Miriam Hospital, Newport Hospital, and Bradley Hospital. The attorney general indicated that his office will utilize research compiled during his 2022 rejection of the proposed merger between Lifespan and Care New England to assess the risks of market dominance.

"What we don't want to have is a Lifespan system that is so dominant in … the Rhode Island marketplace that it drives other systems to a bad place,"

Peter Neronha, Rhode Island Attorney General, via WPRI

Neronha also emphasized the need to ensure that charitable assets, historically donated to benefit Rhode Island patients, are not diverted to support the operations of the Massachusetts-based facilities. He clarified that while he is cautiously optimistic about the acquisition, the protection of these endowments is a non-negotiable priority. Lifespan spokesperson Jess Wharton confirmed that the health system has committed to keeping the attorney general informed and will share the finalized agreement once it is completed.

Lessons from the Steward and Prospect models

The attorney general contrasted the current situation with the ongoing instability surrounding Prospect Medical Holdings, the owner of Roger Williams and Fatima hospitals. Neronha noted that his office previously required Prospect to place $80 million in escrow as a condition of an ownership transfer in 2021, a move he credits with keeping those facilities operational to date. He expressed a desire to avoid the complications currently seen in the Steward bankruptcy, where judicial decisions regarding regional hospital stability are being handled by a court in Texas.

Despite his concerns, Neronha acknowledged the potential financial logic of the move. He noted that Massachusetts hospitals generally command higher reimbursement rates than those in Rhode Island, and that the acquisition could allow Lifespan to refer complex cases to its Rhode Island hospitals, potentially strengthening the system's overall capacity.

What to watch next

• Regulatory Timeline: Massachusetts officials anticipate that the transfer of the Steward hospitals will take several weeks to finalize.
• Judicial Review: The transaction remains subject to approval by the presiding judge in the Steward Health Care bankruptcy case.
• Prospect Sale: Neronha’s office is currently in negotiations regarding the sale of Roger Williams and Fatima hospitals to the Georgia-based Centurion Foundation. While both parties are reportedly nearing an agreement, the attorney general warned that financial conditions remain strict to prevent future insolvency.

For now, Neronha intends to maintain a delicate balance between allowing a major health system to expand and ensuring that local resources remain dedicated to Rhode Island's patient population. He maintains that the complexity of these analyses precludes easy answers, and his office will continue to monitor the Steward bankruptcy proceedings closely to protect the state's interests.