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New order from Malloy may clear the way for decision on L+M, Yale-New Haven affiliation

New London — The relationship between Lawrence + Memorial Healthcare and the Yale-New Haven Health System may not remain in limbo for much longer, after an announcement Wednesday afternoon of a new executive order by Gov. Dannel P. Malloy.

Under the new order, state health care regulators now have the discretion to make a decision on whether L+M and Yale-New Haven should affiliate, creating a new, larger hospital network, said Chris McClure, spokesman for Malloy.

He indicated that a decision could be made soon.

The new order amends one issued by the governor in February, which stalled decisions on hospital mergers, acquisitions and affiliations until after Jan. 15, once a newly created task force had finished reviewing and recommending changes in the regulatory process.

Under the previous order, the state Office of Healthcare Access, which is part of the state Department of Public Health, would have been forced to deny the L+M-Yale-New Haven application on the basis that the new larger network would be too big, McClure said.

Under the language of the new order, that is no longer the case, he said.

This is the second positive development in a week for L+M and Yale-New Haven toward achieving the affiliation.

On Sept. 1, the Rhode Island Department of Health and Attorney General’s Office approved the application, which had to be submitted in that state as well as Connecticut because Westerly Hospital is part of the L+M network.

L+M spokesman Mike O’Farrell was circumspect in his response to the new order.

“We’re aware of the order and are reviewing it as it relates to the process,” he said. “We have yet to hear from OHCA regarding a decision. But we remain hopeful and believe that our case is strong. We look forward to a response.”

L+M and Yale-New Haven submitted their application for the affiliation almost a year ago, and OHCA held two public hearings on it this summer.

A health department spokesman said last week that the hearing had not yet been officially closed by OHCA.

Once the hearing is closed, OHCA has less than 45 days to issue a decision. Health department officials could not be reached Wednesday afternoon to clarify the current status of the hearing.

Hospital officials were hoping for a decision by Thursday to avoid having to repay $250,000 to re-file with the Federal Trade Commission for regulatory approval from that agency, which oversees compliance with anti-trust regulations.

The hospitals paid the fee last year, but the approval was set to expire Thursday.

Hospital union leaders, many New London city councilors and health care advocacy groups, however, have been urging hospital regulators not to rush the decision.

Under the new order Wednesday, Malloy extended the timeline for the task force to complete its work from Dec. 1 to Jan. 15.

The new order also declared that no decisions on applications in the early stages of the regulatory process could be made until June 30.

Since the L+M-Yale-New Haven application is further along, that provision does not apply to its case, McClure said.

j.benson@theday.com

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