Yale New Haven Health Services ’ certificate of need application to buy Prospect CT ’s three Connecticut hospitals has been approved by the state Office of Health Strategy.

The three hospitals are Waterbury Hospital, Rockville General Hospital and Manchester Memorial Hospital. “The settlement terms will ensure that the quality, access, equity, affordability, and cost-effectiveness standards of the (certificate of need) statute are met,” according to a statement from the Office of Health Strategy.

“We are confident that we’ve come to an agreement that is in the best interest of the residents of Connecticut, which has been our priority since receiving this application” Dr. Deidre Gifford, executive director of OHS said.

“I want to thank both the Yale and Prospect parties for their collaboration in reaching this agreement. With these conditions in place under the new ownership of Yale New Haven Health, we can expect that these hospitals will continue to operate and provide high-quality services to their patients and communities.”

The statement said that the settlement agreement ensures residents of the three communities will have local access to safe and affordable health care and that jobs will be preserved.

Yale New Haven Health thanks OHS for their review of our proposed acquisition of Eastern Connecticut Health Network and WaterburyHEALTH. Throughout this process, we have worked closely with the state to maintain access to care for the Waterbury, Manchester and Rockville communities.

Gov. Ned Lamont issued a statement, saying, “I am glad that all the parties have been able to reach an agreement on this transaction in a way that ensures that the residents who live in each of the hospitals’ host communities will continue to have local access to essential medical care, and the jobs of the employees who provide this care will be preserved under this new ownership.

“I know that many people have been anxious to get to this day, and I completely understand their concerns. While it may have taken a little bit of time to get here, this process is an important part of protections under the law to ensure that patients are receiving affordable, high-quality care and that the hospitals will continue meeting all of their obligations to patients, employees, and the community at large,” he said.

“I appreciate the hard work of the Office of Health Strategy and the participation of everyone who helped make this agreement happen. With today’s approval by the Office of Health Strategy, I encourage Prospect to work with Yale to reach a deal that will allow them to finalize this purchase and bring a much-needed resolution to this transaction.”

Dana Marnane, a spokeswoman for Yale New Haven Health, issued a statement, saying, “While OHS’ approval is an important milestone in this transaction, this process is not yet complete. As a next step, we are working with Prospect to reach agreement on several outstanding details that must be resolved to allow the transaction to close. We are hopeful that these details can be addressed, so we can extend the benefits of nonprofit, academic medicine to more patients across our region.”

Vernon Mayor Dan Champagne said, “we welcome this initial step in the process to get Eastern Connecticut Health Network out from under the control of Prospect Medical Holdings.”

“The Town of Vernon will be carefully reviewing the terms of any agreement and its impact on Rockville General Hospital and our community,” he said, in an email, noting “Rockville General Hospital is an essential community asset that has a long history of serving the people of Vernon and surrounding towns.”

“The prospect of having a world-class system such as Yale New Haven Health operating in our community is extremely appealing,” Town Administrator Michael Purcaro said. “Our main focus is ensuring that Rockville General Hospital is a fully functioning medical facility and an integral part of Yale’s plans for our region.”

Yale New Haven Health Vice President of Community and Corporate Alliances Paul Mounds contacted Purcaro on Wednesday afternoon to brief him on the announcement.

“I appreciate Paul reaching out,” Purcaro said. “Open and timely communication with Yale New Haven Health is critical in this process and gives us the opportunity to advocate for the needs of Vernon and our neighboring communities.”

Key conditions settlement include:

— Growth in commercial prices will be constrained to within 0.5% of the Cost Growth Benchmark Target for five years;

— Yale New Haven will invest a minimum of $6 million over three years in mental health and substance use disorder treatment in central western and central eastern Connecticut;

— Community benefit services and activities at each of the respective hospitals will be enhanced;

— Yale New Haven will collaborate with the Department of Social Services and an independent monitor to measure and improve access to specialty physician services for Medicaid patients;

— Regular public meetings, including unbiased community representatives  will be held to represent the interests of the communities on the hospitals’ boards;

— Strategic plans will be developed to retain and enhance health care services at each of the hospitals, including physician recruitment and resource commitments for clinical service programming;

— Advanced alternative payment models will be developed with payers to improve population health, reduce the rate of unnecessary cost or utilization growth, improve access to primary care, address social determinants of health; and

— Physicians, physician assistants and advanced practice registered nurses  will be allowed to terminate their existing non-compete agreements with Prospect without penalty at the time of the acquisition.

An independent monitor will ensure Yale New Haven’s compliance with all of the conditions described in the settlement for five years and will produce a schedule of required reports and data to be shared with the Office of Health Strategy during the performance period.

The settlement also requires Prospect to prioritize resolution of its Connecticut debts, including the payment of $55 million in back taxes by the closing date.

The agreed settlement resolves the transfer of ownership of the hospitals as well as Northeast Medical Group’s acquisition of Prospect CT’s medical group. All filings related to these dockets can be found in the CON Portal under the Docket Numbers: 22-32594-CON and 22-32606-CON.