Hospitals allowed to merge after deal on price cap, Medicaid

November 29, 2018

BOSTON (AP) — Massachusetts Attorney General Maura Healey has cleared the way for two major hospital systems to merge after Beth Israel and Lahey Health agreed to a seven-year cap on price increases.

Healey on Thursday announced the filing of a court settlement that allows the 13-hospital merger to go forward, but with several conditions. One is a guarantee the newly-formed Beth Israel Lahey Health will keep prices below a state benchmark for growth in health care costs — currently set at 3.1 percent — for seven years.

The merged systems also must spend more than $70 million on improved access to health care for low-income communities and make efforts to increase its share of Medicaid patients.

Critics argued the merger would lead to steep price hikes and hurt patients at smaller, community-based hospitals.

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