New Hampshire Attorney General Reaches Negotiated Resolution Regarding the Proposed Transaction Between Valley Regional Healthcare, Inc., Valley Regional Hospital, Inc., and[...]

Concord, NH - New Hampshire Attorney General John M. Formella announces that the Charitable Trusts Unit and Consumer Protection and Antitrust Bureau have completed their respective reviews of the proposed transaction between Valley Regional Healthcare, Inc. ("VRHC"), including Valley Regional Hospital, Inc. ("VRH"), and Dartmouth-Hitchcock Health ("D-HH"). The Charitable Trusts Unit is required to review acquisition transactions involving health care charitable trusts in accordance with RSA 7:19-b. The Consumer Protection and Antitrust Bureau reviewed the transaction pursuant to its authority under RSA Chapter 356 and RSA Chapter 358-A to evaluate the likely competitive impact of the proposed transaction for the benefit of consumers.

Based on the Consumer Protection and Antitrust Bureau's investigation, the Attorney General determined that the transaction, as originally contemplated, risked substantially lessening competition and creating a monopoly for inpatient general acute care services in Sullivan County. The Attorney General worked cooperatively with the parties and negotiated proposed terms that will alleviate the potential harm to health care consumers in New Hampshire.

The terms are based on experts' in-depth analysis of the anticipated loss of competition between the parties in Sullivan County, where both entities serve and compete for patients. Dartmouth-Hitchcock Health is already the largest health system in New Hampshire anchored by its academic medical center in Lebanon, New Hampshire. The D-HH system also consists of two community hospitals, three critical access hospitals, and physician practices across the state. Valley Regional Hospital is a critical access hospital located in Claremont, New Hampshire serving patients in Sullivan County.

Today, the Attorney General filed a fully negotiated proposed Final Judgment in the Merrimack County Superior Court containing the negotiated terms. If approved by the superior court, the terms will ensure that there are adequate protections for consumers and that the benefits promised by the parties from the transaction are ultimately delivered to the Claremont community.

The Charitable Trusts Unit issued its report on the proposed transaction between VRHC, VRH, and D-HH today. The Charitable Trusts Unit found that the transaction substantially complies with the terms of the health care charitable trust change-of-control statute, subject to certain conditions. Those conditions are included in the proposed Final Judgment. The Charitable Trusts Unit's report is available on the Department of Justice website: www.doj.nh.gov/charitable-trusts.

"Dartmouth-Hitchcock Health has agreed to make enforceable commitments to protect competition and maintain and expand services in the Claremont community as part of this transaction to acquire Valley Regional Hospital," said Attorney General Formella. "Dartmouth will fund the remaining necessary capital to build a new medical office building at VRH, and it will fund and operate an addiction treatment center at the VRH campus for at least ten years. Dartmouth has also agreed to maintain essential services at VRH for at least 10 years. These and other commitments will protect competition and ensure patients can access essential health care closer to home. We thank the parties for coming to the table to negotiate this resolution, and we look forward to seeing the numerous benefits promised by the parties delivered to New Hampshire consumers."

Some of the other terms in the proposed Final Judgment include:

• D-HH and VRH agree to prohibitions on certain anticompetitive contracting terms and practices with commercial health insurers;
• D-HH and VRH agree to protections for physicians and mid-level providers in relation to restrictive covenants;
• D-HH and VRH agree to prohibitions on interference with patient referral patterns and treatment decisions;
• D-HH and VRH will develop a Clinical Services Growth Plan to bring additional services to the Claremont community; and
• D-HH and VRH will provide an annual report to the public on their compliance with the terms of the Final Judgment.

In addition, D-HH has agreed to pay $2 million to the Health Care Consumer Protection Trust Fund, which will be used for the benefit of New Hampshire health care consumers.

Click here for the complaint and the proposed final judgment. The terms are subject to court approval.