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Partners settlement put on hold

Judge lets public, rivals comment on deal with state

A state judge Monday opened up a three-week comment period before ruling on a settlement between state Attorney General Martha Coakley and Partners HealthCare System, delaying the resolution of a five-year investigation into the market power and contracting practices of the largest hospital and doctors network in Massachusetts.

Suffolk Superior Court Judge Janet L. Sanders denied without prejudice a motion to intervene in the case by a coalition of hospitals and physicians groups that compete with Partners, which operates Harvard-affiliated Massachusetts General and Brigham and Women’s hospitals along with eight other hospitals and employs about 6,000 doctors.

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But the judge said members of the public, including representatives of Partners rivals, have until July 21 to submit comments on the settlement to Coakley’s office. Sanders gave the attorney general’s office until Aug. 1 to respond to those comments. A new hearing was set for Aug. 5.

Sanders’ decision to let a debate over the settlement play out publicly for another month followed an appeal by Andrea Agathoklis Murino, an attorney representing Partners’ competitors, that the judge not act “as a rubber stamp" and consider the public interest.

“The [settlement’s] remedies are fundamentally flawed ... ,” Murino said. “The priority for us is to allow this court to hear our input, to make sure the court sees all the potential loopholes” in the pact between Coakley’s office and Partners.

Sanders does not have authority to alter a law enforcement settlement reached by the attorney general, but she can reject it if she determines it is not lawful or not in the public interest. It is not clear what would happen next if she were to take such a step.

Under the settlement, struck in May after about six months of negotiations between Partners and Coakley’s office, the Boston-based health care system will be allowed to acquire at least three more community hospitals but will be subject to price caps at the rate of inflation and a ban on further acquisitions for much of the next decade.

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Bruce D. Sokler, an attorney for Partners, said the organization was acquiescing to -- but not celebrating -- an agreement with Coakley that will impose significant hurdles as it tries to deliver more coordinated health care and improve the quality of its care in coming years.

“No one is popping champagne over at Partners,” Sokler told the judge.

Critics of the settlement, including rivals Beth Israel Deaconess Medical Center in Boston, Lahey Health in Burlington, Tufts Medical Center in Boston, and Newton-based Atrius Health had asked for a minimum of a 45-day comment period and the right to intervene in the case.

Lawyers for Coakley and Partners argued the competitors had no standing to intervene because they represented their own private interests, but said they wouldn’t oppose a short public comment period -- something Coakley had previously signaled she supported.

“What’s the big rush?” Judge Sanders asked the parties several times during Monday’s court hearing, which lasted more than 90 minutes. The hearing drew more than 30 spectators, some standing in the small business litigation court room, as well three lawyers for Coakley, five for Partners and allied hospitals, and 10 for Partners competitors.

Arguing against a lengthy feedback period, Deputy Attorney General Chris Barry-Smith said, “From the Commonwealth’s perspective, this matter has been pending for a long time.”

Barry-Smith told the judge that Coakley’s office, working in tandem with the US Department of Justice, initially concluded the Partners’ acquisition of South Shore Hospital would be anticompetitive and threatened to sue to stop the takeover. Ultimately, he said, the investigators decided to use the threat of a suit as “leverage” to affect a broader set of issues, including Partners’ high costs and its practice of “all-or-nothing” contracting with its hospitals and doctors.

“We have collaborated with the Department of Justice every step of the way,” Barry-Smith said. “The Department of Justice supports our efforts here and the conclusions we have reached.”

A spokesman for the Justice Department did not immediately respond to requests Monday to confirm its support of the attorney general’s settlement. Up to now, Justice Department officials have never publicly confirmed their antitrust inquiry into Partners.

Partners competitors, along with some employer and community groups, have contended the attorney general’s settlement will do little to blunt the health care network’s market clout.

A 2008 Globe Spotlight Team series reported that some Partners hospitals were paid 15 percent to 60 percent more for essentially the same procedures as other hospitals. Subsequent reviews by Coakley’s office also found a wide disparity between when Massachusetts health plans pay Partners and what they pay rival hospitals for the same patient care.

Coakley has said the settlement would put strong restraints on Partners’ ability to raise prices in the coming years. She said the deal was preferable to the alternative of suing Partners, a scenario that would have frozen its current price advantages in place while the case worked its way through the courts.

The settlement would allow Partners to complete its takeover of South Shore Hospital in Weymouth and Hallmark Health, parent of Wakefield Hospital and Lawrence Memorial in Medford. The state Health Policy Commission is set to release a staff report Wednesday assessing the Hallmark deal’s impact on cost and competition.

Coakley’s office and Partners have agreed to modify the terms of their settlement, if necessary, to respond to the commission’s findings.

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.

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