JFK Health System And Hackensack Meridian Health Merger

CORPORATE STRUCTURE

JFK Health System is a non-profit comprised of fifteen affiliates: JFK Medical Center; JFK Medical Center Foundation; JFK Healthshare; Robert Wood Johnson Jr. Lifestyle Institute; Hartwyck at Oak Tree; Hartwyck West Nursing Home; JFK Population Health Company; Muhlenberg Hospital Foundation; Atlantic Insurance Exchange; JFK Assisted Living d/b/a Whispering Knoll; Hartwyck at JFK; JFK Ambulatory Care; JFK Medical Associates; and JFK Medical Group. JFK employs approximately 5,000 workers.

Founded in 1967, JFK Medical Center is a community hospital with 498 beds, serving Middlesex, Somerset, and Union counties in Central New Jersey. There are more than 900 affiliated physicians, providing primary and specialized care such as cardiac care, maternity, pediatric, and emergency medicine. The Neuroscience Institute was rated as the number one hospital in New Jersey for stroke and complex neurological disorders.

JFK Medical Center began looking for a partner in 2014, accepting Request For Information (RFI) applications in 2015 from Hackensack Meridian Health (HMH), Atlantic Health System, and RWJ Barnabas. JFK eventually chose HMH as their partner.

Hackensack Meridian Health is the second largest health system in New Jersey, with 11 hospitals, and 24 subsidiaries. HMH employs approximately 28,000 workers.

On November 10, 2016 the plan to merge JFK with HMH was announced with a signing of the Letter of Intent (LOI) sent to the State’s Attorney General.

CN EXEMPTION

Since this was a merger between two non-profit hospital entities, the deal was able to avoid the Certificate of Need (CN) process with the NJ DOH. The legal counsel to JFK Health System wrote a letter to Susan Dougherty, Assistant Commissioner of the Office of Certificate of Need and Healthcare Facility Licensure, confirming their understanding of the law that the JFK and HMH merger was not required to undergo the CN process.  Mr. John Calabria, Director of the Division of Certificate of Need and Licensing, responded by letter affirming JFK’s and HMH’s interpretation.

CHAPA PROCESS

Because this was 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.”  Since this was a merger between two not-for-profit systems and there was no purchase or sale of assets, the deal was exempt from the Certificate of Need (CN) process with the NJ Department of Health (DOH). The merger was finalized January 2, 2018.

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