PROVIDENCE, R.I. (WPRI) — R.I. Attorney General Peter Neronha said Monday his office plans to scrutinize Lifespan’s proposed takeover of two troubled Massachusetts hospitals in order to ensure the transaction won’t harm patient care in Rhode Island.

On Friday, Massachusetts Gov. Maura Healey announced tentative agreements to sell the remaining hospitals in the state owned by bankrupt Steward Health Care, including a deal for Lifespan to acquire St. Anne’s Hospital in Fall River and Morton Hospital in Taunton.

Lifespan, Rhode Island’s biggest employer and largest health system, currently owns Rhode Island Hospital as well as Miriam, Newport and Bradley. This would be its first acquisition of an out-of-state hospital since its ill-fated ownership of what is now Tufts Medical Center a quarter-century ago.

In an interview with 12 News, Neronha said he expects to examine the proposed deal for St. Anne’s and Morton from two angles: antitrust, and specifically whether Lifespan would be too dominant in the region by buying two more hospitals, as well as charitable assets.

The first question, he said, will be whether experts think St. Anne’s and Morton are even part of the same regional market as the other Lifespan hospitals. “It may not be the same market,” he said.

The attorney general’s office will be able to rely in part on research generated during its extensive review of Lifespan’s proposed merger with Care New England, which Neronha ultimately rejected in 2022 on competitiveness grounds.

“What we don’t want to have is a Lifespan system that is so dominant in … the Rhode Island marketplace that it drives other systems to a bad place,” he said. “And that is a very, very delicate balance, and it’s a complicated analysis with no easy answers.”

In addition, Neronha said he will seek assurances that charitable assets donated to Lifespan over the years for its Rhode Island hospitals aren’t redirected to St. Anne’s or Morton, both of which have reportedly suffered from a lack of resources since Steward bought them. Massachusetts officials have said they are putting together a state financing plan to help stabilize the two hospitals.

Neronha said, “We wouldn’t want to see, for example, a diminishment of charitable assets that form part of or all of the Lifespan endowment being used to shore up hospitals when that endowment was formed to take care of Rhode Island patients here in the state of Rhode Island.”

Still, the attorney general was quick to praise Lifespan President and CEO John Fernandez for keeping him in the loop in recent months as executives there considered a bid for the Steward hospitals.

“We appreciate Attorney General Neronha’s interest in the purchase, and to that end, we have kept him informed of the possibility of the purchase and have committed to sharing the agreement with him once it is finalized,” Lifespan spokesperson Jess Wharton told 12 News. (Lifespan will be renamed Brown University Health later this year.)

At Friday’s news conference, Healey indicated it would be several weeks before the deals to transfer ownership of the Steward hospitals are finalized. They would still need to be approved by the judge in Texas who is handling the company’s bankruptcy case.

Overall, Neronha said, “it’s a smart move on behalf of Lifespan in my mind.”

Hospitals in Massachusetts are paid higher reimbursement rates than hospitals in Rhode Island regardless of the form of insurance being used, he said, so providing care at St. Anne’s and Morton should be more lucrative than doing so in Rhode Island.

Plus, Lifespan could steer patients who come through St. Anne’s and Morton to have more complex procedures done at hospitals in Rhode Island, which would also benefit those facilities, he said.

“Maybe I’m missing something, but on balance my instincts tell me it’s going to be a good thing for [Lifespan], and will strengthen them as a system,” he said.

Neronha also sought to link Massachusetts’ experience with Steward to Rhode Island’s experience with Prospect Medical Holdings, the for-profit owner of Roger Williams and Fatima hospitals, which has faced heavy criticism locally and is currently seeking to sell the facilities.

“You’ve got a judge in Houston who’s making decisions about hospitals in Fall River,” he said of Steward. “I don’t think that’s a place where any state wants to be.”

If Roger Williams and Fatima ever wound up insolvent, Neronha said, it’s important they are no longer part of Prospect in order to ensure the bankruptcy process plays out in Rhode Island. “So those are some of the things that we’re taking into the balance when we try to figure out the best course for those hospitals,” he said.

Neronha has approved Prospect’s proposed sale of Roger Williams and Fatima to the Centurion Foundation, a Georgia-based nonprofit, but subject to a long list of financial and other conditions. He said Prospect initially “balked” at those conditions, but now the two sides are “getting closer” to a final agreement.

He also reiterated that he believes Roger Williams and Fatima only remain open because his office required Prospect to put $80 million in escrow for five years as the price of getting approval for an ownership transfer back in 2021.

“Even if Prospect sells those hospitals to Centurion and the terms of our agreement are met, it doesn’t mean that those hospitals won’t be in danger of closing one, two, three years down the road,” he said. “And I just don’t think Rhode Island is even thinking about that moment.”

Ted Nesi ( tnesi@wpri.com ) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter , Threads and Facebook .

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