Health Care

Consent Decree Authorizes Jameson Merger with UPMC

NEW CASTLE, Pa. ­– Jameson Memorial Hospital’s north campus will remain an acute care hospital for at least 10 years following the completion of its $80 million merger with Pittsburgh-based UPMC, according to the terms of a consent decree announced today by the office of Pennsylvania Attorney General Kathleen G. Kane.

The final order clears the way for Jameson Health System Inc. to merge with the University of Pittsburgh Medical Center.

“We hope to accomplish that by May 1,” said Jameson spokeswoman Lisa Lombardo. “We continue to believe this merger is the strongest solution for a healthy future for Lawrence County, its residents and surrounding communities.”

The merger was first proposed in September 2014 but was held up by concerns raised by the attorney general that it would “substantially lessen competition in one or more relevant health-care services markets in violation of state and federal laws.”

In 2014, Jameson, a nonprofit, was under severe financial distress with total operating expenses of $110 million compared to net patient revenue of $105 million.

In refusing to approve UPMC’s bid, the attorney general’s office proposed that Jameson undergo a remarketing process to determine whether there were viable alternative buyers other than UPMC, western Pennsylvania’s largest health-care system. That process resulted in three firms submitting written proposals to acquire Jameson. Of those three, the attorney general’s office believed at least two satisfied the bid requirements that were set forth in the remarketing process. Jameson disagreed.

Arbitration followed with retired U.S. District Judge Donald Ziegler ruling in January that other bidders seeking to acquire Jameson Health System did not submit qualified bids. As a result of the binding ruling, attorneys began negotiations on the terms of a final order.

The consent decree requires that UPMC Jameson maintain all contracts Jameson currently has with health plans through their expiration, and also requires UPMC to contract with all health plans that want one with Jameson for 10 years. If a health plan and UPMC cannot agree on terms, the final order provides for last-best-offer arbitration to set those terms.

UPMC Jameson must remain an acute care hospital at Jameson Memorial Hospital’s north campus for at least 10 years and maintain an appropriate level of inpatient and outpatient services, as well as other specific services outlined in the final order.

“The Office of Attorney General throughout this process has worked to protect the interests of citizens in Lawrence County and the surrounding areas,” Attorney General Kane said in a statement. “It is the office’s responsibility to ensure that people have access to affordable health care. We believe this agreement is a step toward accomplishing that goal for residents in these communities.”

Published by The Business Journal, Youngstown, Ohio.