Faxton St. Luke’s, St. Elizabeth to move forward with affiliation agreement

The boards signed a memorandum of understanding to affiliate the two organizations last December.

The hospitals submitted the application on Oct. 4. They’re now waiting for word from the Department of Health (DOH) about when the New York State Public Health and Health Planning Council will consider the proposed certificate of need.

The hospitals are hoping it could be as early as December of this year, according to St. Elizabeth.

“For the past year, we have been working through a number of steps including the review of legal and financial due diligence for the hospitals, meetings with a number of agencies within the [state Health Department] as well as representatives from the Federal Trade Commission,” Scott Perra, president and CEO of Faxton St. Luke’s Healthcare, said in the news release. “We are pleased that we can now move to the next step, having our application reviewed by the DOH.”

Mohawk Valley Health System is the name of the proposed parent organization that will govern the two hospitals, according to the news release.

A new board of directors, comprised of 18 members with equal numbers from the FSLH board and the St. Elizabeth board, will govern the proposed parent organization.

Each hospital will still maintain a separate board, which will have significant overlap of members with the parent board.

The two health-care organizations employ nearly 4,500 people and have combined operating budgets of more than $500 million.

The hospital CEOs — Perra and St. Elizabeth’s Richard Ketcham — anticipate the facilities should complete the affiliation process in the spring, according to the news release.

Only one CEO, FSLH’s Scott Perra, will oversee the management team for both organizations, the release said.

“Another step in the process is to file a notification with the [U.S.] Department of Justice under the Hart-Scott-Rodino Act. These types of affiliations are reviewed from an antitrust perspective,” Perra explained. “We anticipate that filing will take place by mid-October.”

The Hart-Scott-Rodino Act, which President Gerald Ford signed into law in 1976, requires large companies to file a report with the Federal Trade Commission and U.S. Department of Justice before completing a merger, or acquisition, or transfers of securities or assets.

Under the provision, government regulators determine whether the transaction would violate antitrust laws.

Contact Reinhardt at ereinhardt@cnybj.com