Cooper Health System And Trinity Health Hospitals Merger

The Cooper Health System (a combination of the acute-care and children’s hospitals, Cooper University physicians group [doctors employed by the hospital], and the MD Anderson Cancer Center) had total revenues in 2015 of $1.13 billion. The move by Cooper to take over the three Trinity hospitals will make the new Cooper Health Care system the 4th largest in the state. It is projected that this merger will create a $2 billion healthcare system employing 12,000 workers with 1,382 beds between the four hospitals.

The chairman of the board for Cooper is political powerhouse George Norcross, III, who has helped make Cooper a major player in New Jersey healthcare. Norcross was instrumental in bringing the MD Anderson cancer care affiliation to the hospital.

Once the merger is complete, Cooper will have control of the three Maxis/Trinity hospitals while Trinity will maintain control of the Our Lady of Lourdes Health Foundation and the St. Francis Medical Center Foundation (see organizational charts).

CN EXEMPTION
Since this is a merger between two non-profit hospital entities, the deal is able to avoid the Certificate of Need (CN) process with the NJ DOH. The legal counsel to Cooper and Trinity Health will likely write a letter to the Office of Certificate of Need and Healthcare Facility Licensure, confirming their understanding of the law that the Cooper and the 3 Trinity hospitals merger will not be required to undergo the CN process.

CHAPA PROCESS
Because this is a merger between two not-for-profit entities, the merger is regulated by the CHAPA process, which requires a review by the NJ Attorney General (AG) and the Commissioner of Health. The AG must determine if the deal is “in the public interest,” and the Commissioner of Health must determine if the proposed deal “is likely to result in the deterioration of the quality, availability or accessibility of health care services in the affected communities.” As a merger between two not-for-profit systems with no purchase or sale of assets, the deal is exempt from the Certificate of Need (CN) process with the NJ Department of Health (DOH). Maxis Health, sole corporate member of both Lourdes hospitals and St. Francis sent the AG’s office a letter on September 18, 2017 as a notice of the proposed transaction including the Letter of Intent and the before-and-after organizational chart (posted on this website).

LETTER OF INTENT
On August 30,2017 Cooper University Health Care sent a Letter of Intent (LOI) to Maxis Health System (Trinity Health is the parent company) outlining the basic structure of the merger agreement with fifteen steps including: Confidentiality agreement; Non-Binding Nature of LOI; Term of agreement; Due Diligence Issues; among others. Both parties will undertake negotiations with the intent to merge based on the parameters included in the letter of intent.

TIMELINE
Once the AGs office has been notified, Maxis will be obligated to answer questions to the satisfaction of the AG addressing all aspects of the merger including access to services, improvements to infrastructure, board members, and maintaining all current hospital services. The process for answering the initial questions and further completeness questions before reaching final approval may take a year or longer.