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Coakley reopens talks with Partners HealthCare

Massachusetts Attorney General Martha Coakley says her office will renegotiate part of an agreement it hammered out with Partners HealthCare, Massachusetts' largest hospital and physicians' network.

Coakley's office made the announcement Wednesday hours after the state's Health Policy Commission released a report criticizing part of the agreement that dealt with Partner's planned acquisition of Hallmark Health Systems, which owns Lawrence Memorial Hospital in Medford and Melrose-Wakefield Hospital.A Coakley spokesman said the original agreement with Partner's included a provision that allowed both sides to reopen negotiations in the event that the Health Policy Commission determined there would be a "likelihood of materially increased prices" as a result of Partners' acquisition of Hallmark.

"Those negotiations begin today," Coakley spokesman Brad Puffer said in a statement. "We continue to work toward this strong consent judgment that will fundamentally alter Partners' negotiating power and save costs across the entire network, accomplishing more than a lawsuit would have done."

A spokesman for Partners issued a statement defending the deal and saying the company disagreed with the report's findings but expected to begin discussions with Coakley immediately.

"This transaction is a unique opportunity for us to work with Hallmark Health in order to improve patient care for Massachusetts residents living north of Boston," said Partner's spokesman Rich Copp.

Any deal between Coakley and Partners must still be approved by the courts. A public comment period on the agreement, filed in Suffolk Superior Court, ends Sept. 15. The next court hearing is set for Sept. 29.

Coakley, who is also running for the Democratic nomination for governor, has come under increasing fire from her Democratic and Republican rivals over the agreement with Partners.

Coakley said the deal resolved her antitrust investigation into the company.

She said the deal bars Partners from raising costs across its network more than the general rate of inflation through 2020. The rate of inflation has averaged 1 percent to 2 percent over the past several years. Coakley said that's well below the rates traditionally negotiated by Partners over the past decade.

The deal also seeks to slow the growth of Partners by capping its physician growth for five years, preventing it from negotiating commercial insurance contracts for doctors not employed by Partners for 10 years, and blocking hospital expansion in eastern Massachusetts and Worcester County for seven years, exempting Emerson Hospital, a Partners affiliate.

Coakley's two Democratic opponents in the governor's race — Donald Berwick and Steve Grossman — have called the deal a disservice to the interests of patients, arguing that it will expand Partners' market dominance and drive up health care spending.

Republican candidate Charlie Baker, former head of Harvard Pilgrim Health Care, said the agreement is too complicated and too hard to enforce. He has said the deal should have focused on two or three items, like requiring Partners to post the prices of their medical services and freezing any expansion of their physician network.
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