A Massachusetts judge rejected an agreement that would have allowed Partners Healthcare to acquire three hospitals.
The Boston-based system is already the largest in the state, with 12 hospitals including Brigham and Women’s Hospital and Massachusetts General Hospital.
The state’s then-attorney general, Martha Coakley, reached a consent decree with the system last year to resolve an antitrust investigation into the deal, which was fiercely opposed by Partners’ competitors. The agreement would have barred Partners from raising prices beyond the rate of inflation through 2020.
Superior Court Judge Janice Sanders, however, declined to approve it, writing that she has “serious concerns” about the enforceability of conduct remedies that Coakley and Partners agreed upon.
The hospitals include 329-bed South Shore Hospital in South Weymouth, Mass., and two-hospital Hallmark Health System, with campuses in Medford and Melrose.
Attorney General Maura Healey, who succeeded Coakley this month, filed a brief with the court expressing her reservations with the deal Coakley brokered and saying she would attempt to block the acquisitions if the judge rejected it.
Sanders concluded that the acquisitions “would cement Partners’ already strong position in the healthcare market and give it the ability, because of this market muscle, to exact higher prices from insurers for the services its providers render,” she wrote.
Those price increases are estimated at tens of millions of dollars each year, she added, citing figures from the Massachusetts Health Policy Commission, a state agency. The state’s health insurers had provided the cost projections to the commission, but Partners disputed them.
Partners emphasized after the ruling that its goal with the acquisitions had been to further its population health management initiatives, which require primary care physicians and community hospitals that are “clinically and financially tied to our system.”
In an e-mail to Partners’ employees, CEO Dr. Gary Gottlieb called the decision very disappointing and said the system’s leadership team would evaluate all its options.
The state’s largest healthcare union, 1199 SEIU United Healthcare Workers East, released a statement praising the ruling. The group represents about 300 healthcare workers at Hallmark’s Melrose-Wakefield Hospital.
“Healthcare workers believe this is an important step towards protecting the role of community and safety net hospitals by countering the aggressive and unsustainable Partners business model of high costs for patients and low wages for many Partners’ employees,” the union said.
Follow Beth Kutscher on Twitter: @MHbkutscher